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Growth Opportunities For Agritech Exports To Aust

Growth Opportunities For Agritech Exports To Australia

Melbourne, May 9, 2003 -- Recent rain in parts of drought-affected Australia together with a campaign to raise the profile of Kiwi agritech across the Tasman present good growth opportunities for smart companies, says New Zealand’s Trade Commissioner in Melbourne.

Mark Ingram says with rain having fallen across parts of New South Wales, South Australia, Victoria, Tasmania and Western Australia, and further falls forecast, farmers will be looking for maximum productivity in the coming year, to offset losses during the drought.

“New Zealand already has a reputation for top quality and innovation in agritech, making kiwi companies the ideal supplier of the leading edge agritechnologies Aussie farmers will be looking for,” he says.

At the same time Trade New Zealand is working with New Zealand Agritech to increase agritech exports to Australia, which is our biggest market.

Mark Ingram says this includes an Agritech Trade Mission to Australia in August, led by Agriculture Minister Jim Sutton. The mission will take exporters to key field days and conferences, establish a showroom of agritech companies and products at Trade New Zealand’s Melbourne offices and produce a research report on agritech opportunities in Australia.

Mark Ingram says Aussie farmers have money to spend on agritech.

“Australian farmers currently have A$2.1 billion in Farm Management Deposits (FMDs) which are funds kept in reserve for times of economic hardship such as the drought. With a record breaking season in 2001 and given the high level of FMDs, Australian farmers are cash rich and well positioned to inject capital into systems that will improve profitability.”

New Zealand’s 20 years of experience operating in a de-regulated dairy industry is another factor that can drive demand for kiwi agritech, Ingram says.

“Since the partial de-regulation of the Australian dairy industry two and a half years ago, there have not been any significant farm management adjustments. The drought has been a major wake up call because it has shown many dairy farmers that they are now exposed to the full impact of their on-farm inefficiencies. This is driving the need to implement better farm management practices.”

Trade New Zealand’s agritech sector specialist Grant Sewell says exporting across the Tasman has been tough for New Zealand agritech companies during the drought. Australian farmers have had little cash to spend, with some having to use what they can muster to buy water.

“Companies selling capital goods like mowing equipment have been hit especially hard,” Sewell says. While it will be some time before spending on machinery and equipment returns to good levels, Sewell says the recent rain will fuel demand for normal farm inputs such as animal remedies and fencing products.

Sewell’s advice to New Zealand agritech companies is not to reduce their visible presence in the Australian market, no matter how tough the going gets.

“Australia is a place of boom and bust. When they’re making money, farmers are big spenders and will invest a lot in their enterprise. New Zealand agritech must continue to be seen in the market to show they are interested.”

New Zealand agritech exports to Australia were worth NZ$241 million in 2002.The most recent estimate of the total Australian market for agricultural equipment puts the value at A$3.37 billion, showing there is considerable room to grow New Zealand agritech exports.

“We need to be aggressive and proactive to achieve that growth,” says Ingram.“ Many Australians are looking west as a free trade agreement with the United States comes closer. New Zealand can compete successfully on a cost and quality basis with US suppliers but we risk losing traction if we rest on our laurels.”

A further Trade New Zealand initiative is underway to promote greater co-operation between agritech companies on both sides of the Tasman

Ingram says Australia and New Zealand are set to dominate world dairy trade as protectionist messages from the European Union are progressively eliminated and production from Australasia increases. “That presents exciting opportunities to jointly promote dairy agritechnologies.”

He says the convergence of agribusiness with biotechnology presents other opportunities for co-operation, with the biotech sectors in both New Zealand and Australia collaborating to improve agricultural productivity and take their new platform technologies to third markets such as the US.

Trade New Zealand has a strategy to jointly promote the biotech and agritech sectors in Australia.

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