Massive potential to grow NZ agriculture - report

Media Release
Embargoed until 12noon, 26 November 2009

Massive potential to grow New Zealand agriculture, report shows

The release of the Pasture Renewal Charitable Trust commissioned BERL study, An economic analysis of the value of pasture, highlights not just the value of pasture to the New Zealand economy, but the great potential to increase productivity.

“This economic analysis of pasture to the New Zealand economy highlights the real potential we have to substantially increase productivity,” says Don Nicolson, President of Federated Farmers.

“While the report doesn’t mention it, water storage infrastructure will substantially reduce farm risk, while increasing the volume and productive value of pasture. Water storage with pasture renewal is an economic game breaker.

“Yet the Emissions Trading Scheme is like a gorilla in the room, so research and development must be increased to 3 percent of GDP to get the Global Alliance on ruminant emissions underway. Farmers need to be given the confidence to invest.

“Pastoral agriculture accounts for 41 percent of all exports and 12.1 percent of GDP. The wider agricultural sector represents 64 percent of everything New Zealand sells to the rest of world and up to a fifth of our total GDP.

“The Pasture Renewal Charitable Trust’s report shows there is huge potential for all farmers in pastoral agriculture to increase returns through pasture renewal.

“Based on the latest payout, an increase of just one tonne of dry matter per year over the 1.96 million hectares in dairy would increase farmgate returns by well over a billion dollars.

“That’s not more cows per hectare but increasing the per hectare growth of feed that is then converted into milk solids. That’s called efficiency not intensification.

“We see the same picture in sheep and beef, where an increase in pasture production of between 10 and 30 percent is possible over the 8.8 million hectares of pasture in production.

“What we as farmers have to draw from the Trust’s report is the importance of strategic planning for pasture renewal.

“From a farm-gate return perspective, BERL’s modelling shows that increased farm-gate values for sheep and beef farms could be as high as 18 percent and 15 percent for dairy farms.

“That could increase pastoral agriculture’s direct contribution to GDP by $800 million but the total effect on GDP is more like $2.2 billion, when the full upstream and downstream effects are taken into account.

“That’s equivalent to the revenue of 460,000 additional international tourist arrivals but a gain that could come through better strategic pasture management. Pastures don’t last forever and Federated Farmers congratulates the Trust on this report.

“Clearly, farmers need to look at our pastures, many of which may now be past their use-by date. Yet farmers also need the confidence to invest in their pastures but uncertainty over the impact of the ETS does little to boost that confidence,” Mr Nicolson concluded.

ENDS

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