What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
Professor Alan Renwick says the country’s food system is in “disarray”, adding that before forming a strategy, the depth and breadth of the challenges within the food system need to be understood.
“We have major challenges with waste – up to one-third of the food we’re producing is not being consumed,” Renwick says.
“This, coupled with a food system incurring high input costs, means we are using costly resources to produce food that is thrown away,” he says.
Renwick says New Zealand needs to address both productivity and profitability.
The country’s productivity growth rates have declines since 2000, with the primary sector unable to produce more with the same or fewer inputs, not accounting for the costs associated with biodiversity loss.
Renwick says the rise in food inflation across New Zealand since 2021 has resulted in further challenges for families who were already food insecure.
“A World Vision Study showed that our price spike was higher and slower to come down than other countries,” he says.
“We need to understand how our food system and supply chains differ from other countries. Is it that supermarkets have too little competition? Is it a consequence of our export-focused primary production that is detrimental to our food supply?”
Renwick believes opportunities to add value and grow more are possible through overcoming these challenges and creating a more resilient food system. To achieve this though, and to shape a national food strategy, further research is necessary.
“As Co-Director of the Lincoln University Centre of Excellence Transformative Agribusiness, we investigate alternative energy and sustainable food systems,” he says.
“Continued research of circular approaches will offer enhanced solutions for food production designed to reduce our footprint and waste.”
Renwick says that to form a new national food strategy, New Zealand needs to start by building a more resilient system.
He suggests that diversifying systems, moving away from the current model of specialisation that has made the country more vulnerable, particularly to extreme weather events such as Cyclone Gabrielle.
Addressing and adapting to climate change requires urgent attention, both to build resilience and to reduce emissions. The sooner this is done, Renwick says, the smaller the associated costs will be.
He says the government needs to take the lead on a national food strategy.
He also acknowledges the importance of all stakeholders from the food system being involved, including advocates for exporting primary production and those who want a greater focus on supplying food locally.
To achieve this level of cooperation, Renwick explains, will require a move away from traditional policymaking in this country.
“Most policies focus on individual aspects of the food system,” he says.
“Rather, all aspects – at the farm level, environmental, trade, health and nutrition for all New Zealanders - need to be considered within a framework that understands how they are interrelated. This supports a coordinated response so that one facet of the food system does not negatively impact another.”
