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Innovation as an opportunity for strengthening farming

Innovation as an opportunity for strengthening farming


Speech by Dr William Rolleston, Federated Farmers Vice-President, to the World Farmers Organisation, Buenos Aires, Argentina

It is a pleasure to speak to you on the theme of Innovation as an opportunity for strengthening farming.

In this context I will consider innovation in its broadest sense – that is the whole science and knowledge creation chain.

I will look at not only the drivers for innovation in farming but also provide you with some insights into how we in New Zealand have organised our science system as it relates to agriculture, what we are doing locally and our contribution to and leadership of international efforts. Finally I want to make a comment on the role of science and innovation in society and conclude that it is the perception and understanding of science in society, reflected in regulation, which is the biggest obstacle to innovation.

But first some global context as we see it from New Zealand.

Population and food security
As a species we currently face our largest challenge ever. That is the two people who join humanity every second, of every minute, of every hour.

In the time my session takes today, the human race will have grown by around 3,600 people. That sobering number represents an enormous challenge to international order and our modern civilisation.

At the Cairns Group meeting yesterday, food security and our role as farmers to feed the world was a dominant issue because it influences global security. Future wars could flare over access to land, water, food or energy. Or even the freedom to gain from their use.

Land
The second issue is while the population expands we are not making any more land. In 1960, one hectare of land was available to feed just over two people. By 1999 that same hectare of land had to feed four people and by 2050, when the world population is expected to peak at around 10 billion, we will need each hectare of available agricultural land to feed over six people.

Market demand
The third global issue is that as families reduce in size, children become more precious to their parents who become more risk adverse. They want safe food for their children and life prolonging products for themselves. There is also a change in the type of food desired by citizens as they advance into the middle classes and away from crops and carbohydrates towards animal protein products.

The environment
Fourth, there is a concern for the environment. Farmers are well aware that their future depends on what they do today. However, as societies move from an agronomic to an urban base and agriculture intensifies, the flow of raw materials changes as food and fibre is exported from the local environment. This presents new intergenerational issues for farmers.

The green revolution has given farmers spectacular increases in production by lifting agriculture’s input limits. Following the green revolution our limits are becoming external, that is, the impact intensive agriculture is having upon our water, our biodiversity and our planet in the form of greenhouse gas emissions.

In New Zealand, the pressure on soils, waterways and biodiversity are a concern for many.
Nationally and internationally society has responded in numerous forms, most notably, with the organic movement, the need to consider and address climate change and, in some countries, opposition to genetic modification. In my view some of these concerns are misdirected but I will come back to that later.

A competitive world market
Fifth, we all exist in a competitive world agricultural market. The developing sophistication of agriculture globally is a competitive threat as well as an opportunity. I would like to give a collaborative message, that is, countries can work together to meet world demand, utilising the competitive and comparative advantages of each to produce food for the world’s increasingly demanding consumers.

These global drivers demand solutions from those economies with the vital resources of water, land and people who have the capacity and courage to think outside the square and find new solutions.

Changes in science structures and direction
New Zealand has moved recently towards a more collaborative approach to science.

We are a small country and the competitive model, while it drove efficiencies in some areas, resulted in scientists spending far too much time writing unsuccessful applications. The competitive model meant our institutions and the scientists within them were talking less and less to each other.

Five years ago the government, to which I was an advisor, started lessening the competitive model in favour of collaboration. The rationale was that we have few resources in this space and those resources need to be strategically deployed and coordinated.

We merged our science policy and funding agencies. We increased the bulk funding of our government-owned research institutes, giving them more autonomy but also requiring them to perform to strategic and negotiated outcomes.

As well as this we have established Centres of Research Excellence and Research Platforms hosted by a university or Crown Research Institute respectively. Each establishing a network of scientists and institutions to focus and collaborate on specific areas of scientific endeavour.

For agriculture, the Primary Growth Partnership is a government/industry scheme helping to engage business and science with a focus on strong commercial outcomes. The fund allows for single programmes all along the value chain - from producer to customer - to be progressed at the same time.

At the micro level the sustainable farming fund is an opportunity for individual farmers with a good idea to be funded with outcomes for the economy and the environment.

Most recently, the government has launched ten National Science Challenges. These challenges are medium term, mission led and collaborative projects in areas of critical strategic importance to New Zealand.

The funding model is a mixture of competitive and negotiated contracts, which I and other members of the government appointed Science Board, will be selecting over the next eighteen months. The National Science Challenges which are of particular interest to agriculture are:
§ High value nutrition
§ Our land and water
§ Our natural heritage, and
§ Resilience to nature’s challenges

These National Science Challenges form the strategic hub of our science system. These are all positive moves to create a more commercial and collaborative science and innovation ecosystem, enabling more strategic deployment and coordination of our scant research resources particularly in the agricultural sector.

Science priorities
A good science ecosystem will provide a balance between discovery and applied science, a balance between economic, social, cultural and environmental outcomes and will reward excellence from wherever it may come.

It should work to a country’s strengths and for New Zealand that is agriculture. For farmers in New Zealand our priorities for research and innovation are:
§ Increasing the value of our products
§ Increasing our productivity; and
§ Reducing our risk.

When we as farmers stand inside the farm gate, we have two main concerns; can we run a profitable business and do we have the freedom to operate?

Farmers are essentially price takers so costs anywhere in the value chain tend to be reflected in farm profitability. Productivity inside and beyond the farm gate is critical.

Farming is a complex and at times, unforgiving business and one of the many ‘arts’ of being a top farmer is to manage multiple farm inputs for crops and livestock. We must also take account of the unpredictability of weather and commodity markets too.

The role of science is to convert farming’s art into rational decisions, allowing us to intelligently use resources and minimise our impact. We are only scratching the surface on-farm when it comes to the adoption and use of technology to aid decision making. For example, the now ubiquitous smart phone and the applications which come with it are providing a plethora of information, which can support on-farm decision making and provide new channels for innovation.

Increasing the value of our products
Increasing the value of our products can provide farmers with confidence about their future. Developing new products tailored to specific market preferences and needs, provides opportunity for increased farm gate returns, without any increase in volume.

It is here where we need a close collaboration between farmers, scientists, processors and marketers to communicate market requirements into the science pipeline.

As farmers, we can sometimes feel disconnected from the end market, yet it is the end market we need to understand most because that determines not just how we farm, but what we farm.
We can increase the value of our products by improving our current products or we can create new and novel food products like sweet tasting kiwiberries - products that stimulate demand and maximise returns through premium prices in domestic and international markets.

So we need scientists to be thinking outside the square as well. Research can take some direction from its users and that is important but as Henry Ford famously said, “If I listened to my customers I would have built a faster horse.”

These innovations require creativity and courage

Increasing our productivity
In New Zealand, since 1990, we have managed to produce seven percent more lamb but from 55 percent fewer sheep. With beef, our meat volumes are up 23 percent but from 11 percent fewer cattle. Meanwhile dairy milk production growth per cow has averaged 26 percent since 1990.

We’ve also managed to reduce carbon per unit of product by about 1.3 percent a year.
Beyond these impressive gains farmers in New Zealand require developments in crops and pastures which require less water and fewer nutrients. These are characteristics required throughout the world and would revolutionise the economics of farming and provide greater security in the face of climate variation.

The bonus is that we reduce nutrient loss and get to keep more water in the face of our ever decreasing global water resource. Like so much that science has to offer; an economic win and a win for the environment.

For livestock, productivity gains also lie in the nutritive value of feeds and with it comes the ability to influence effluent and greenhouse gas emissions too.

In other words, we need science to help us to do a whole lot more from a whole lot less - all the while ensuring that the soil minerals, insects, bacteria and nutrients are kept in optimal balance.
We may have something to learn from organic agriculture here but we must be sure that the ideas we deploy have a scientific basis while satisfying our productivity and environmental requirements. Not just ours but humanity’s.

Science, not dogma, lies at the heart of turning our challenges into opportunities.

Water and Water Storage
In that respect water represents a huge opportunity for New Zealand farmers.

New Zealand is endowed with plentiful water but it is not in the right places at the right time. The ability to use the water resource for economic betterment is critical to our national goal of doubling the value of our agricultural exports by 2020.

Our government has recognised this problem and is working on infrastructure for water storage and distribution through the Irrigation Acceleration Fund and the Crown Water Investment Company.

It has committed $80 million to invest in regional irrigation schemes as the first stage of a commitment to invest up to $400 million. Be clear this is an investment by the government – it expects to get its money back – but it frees up capital at the start of a project at the critical time when it is needed so that resources can be used to innovate and explore the best solutions.

Water storage and water harvesting creates a win for our economy and a win for the environment – providing environmental flows to maintain in-stream water quality and water for agriculture to increase productivity while mitigating against the challenges of low flows and drought.

However, with increased water use comes the threat of reduced water quality – a value highly prized by New Zealanders. Water storage in New Zealand illustrates how, when we increase a constraining input, we create externalities which need to be addressed.

Reducing our risk
But farming is a complex business and risk comes in many forms, be it climatic, disease, pestilence, market, regulatory, social or the environmental externalities I have just alluded to.
As we solve the input constraints in agriculture we are knocking up against these environmental externalities and with them, the threat of constraining regulation.

For example, the policy response to nitrogen in many countries is akin to a blunt force; nutrient caps or farming by consent as many authorities invoke caution in the face of insufficient knowledge on management options.

Helping farmers develop better nutrient cycling will satisfy the public and policymakers that we have the environmental means to grow as a responsible and responsive industry.

Retaining these nutrients on-farm is vital for us to farm to our potential. The world needs its most efficient producers farming to potential while using resources optimally.

Meeting these real environmental challenges demands that the whole global agricultural sector be united to address pasture, crops, soils, farming systems, feed and genetics.

Increasingly we need to adapt a collaborative approach to face these challenges. Collaboration needs engagement from all sides as we need to understand one another’s points of view. How do we do this globally?

The recently established Global Research Alliance is an example by which greater global collaboration is being achieved.

Global Research Alliance
My country’s agricultural emissions account for nearly half of our national greenhouse gas profile – with methane from ruminant digestion making up almost two thirds of this.
We nevertheless remain one of the world’s most carbon efficient producers.

The world has moved on from Kyoto. Rather than a blind adherence to headline numbers and narrow strategies, nations are looking to their own strengths to play their part in the battle to reduce greenhouse gases. This is a global problem and demands our collaboration.

Developing countries too are realising that they must also play their part. Like New Zealand, many developing countries also have a high proportion of biological emissions.

The recent FAO report on greenhouse gas emissions from livestock has identified increased productivity as the best means to mitigate greenhouse gases from livestock. The challenge for New Zealand is we are already at the top end of the productivity curve so mitigation options are not readily available at scale.

Improving productivity in developing countries not only reduces the impact livestock have on greenhouse gas emissions but also provides a path and opportunity to greater prosperity.
This is why Federated Farmers of New Zealand supports the call by WFO president Robert Carlson to have agriculture applied to a separate work stream in COP19.

It is also the reason that in 2009, New Zealand initiated the Global Research Alliance on Greenhouse Gases with the aims of enhancing agricultural productivity while reducing agricultural greenhouse gases.

The shared vision was to bring countries together to find ways to grow more food without growing greenhouse gas emissions.

The Alliance has gone from strength to strength.

The initial 20 country membership has doubled to cover all regions of the world.

Partnerships with a number of prominent international organisations have enabled the Alliance and its research groups to advance its work and to avoid duplication of effort.

As co-chair of the Global Research Alliance Livestock Research Group (LRG), New Zealand leads and participates in a range of linked activities. These include developing:
§ Best practice guidelines and standardising international research practices on measurement and mitigation techniques, as well as,
§ New technologies for reducing methane and nitrous oxide emissions from pastoral livestock systems.

The Livestock Research Group has also established six international research networks, which include science experts from both alliance and non-member countries.

We are pleased to see that the WFO has recently become a partner to the Alliance.

Building Capability
Later this year it is planned that Federated Farmers of New Zealand, in conjunction with the WFO and the Global Research Alliance will host a study tour for a number of farmers from across the globe. The visit will cover best practice farming, water management, infrastructure, environmental risk management and mitigation, innovation in farming productivity, and the regulatory context.

New Zealand has also provided scientific expertise and co-funding in a major partnership project with the Inter-American Development Bank (IADB), under the FONTAGRO fund. This capability project aims to measure national greenhouse gas inventories and develop mitigation options adapted to farming conditions in Central and South America, in particular in Argentina, Colombia, Chile, Dominican Republic, and Uruguay.

On the back of the success of this project, the New Zealand government and FONTAGRO have approved funding for two additional regional projects involving eight Andean and Central American countries.

New Zealand will again support this project and provide technical training for the scientists involved; the project is due to start in the coming weeks.

Today our agriculture minister is leading a delegation of New Zealand agriculture related companies in Chile, while New Zealand farmers themselves are investing in farms in Asia and South America. All this activity helps build world farmer capability as we are able to pass on lessons and learn some on the way.

Clearly countries have understood that solving global problems, such as the vulnerability of agriculture to climate change, requires a collaborative solution based in science.

Working together can achieve faster progress towards improving agricultural productivity and reducing its contribution to climate change.

In conclusion, agriculture remains the backbone of the New Zealand economy. Some 72 percent of all New Zealand’s exports are from the primary sector.

Our world-class products enhance our reputation as a producer of high quality and safe food.
The numbers are impressive reflecting the reality that everyone has to eat.

Our primary sector is unique in its exposure to international markets, with over 85 percent of our agricultural production exported.

Agriculture, forestry and fisheries contribute 12.7 percent, or more than one eighth, of GDP on current figures.

We are a small country of only four million people yet we are the world’s 12th largest agricultural exporter by value. We are the largest exporter of sheep meat and of dairy produce and second in wool and softwood.

But we must earn our licence to operate and develop from wider society. If we want to apply science solutions to agriculture we need to be able to take society with us and at the heart of that are education systems, which communicate the value and understanding of science and innovation.

This in my view is the greatest barrier to innovation in farming. To meet the challenges of providing food for the world, increasing our productivity and the value of our products, and doing this within our environmental footprint, farmers need to have every tool in the toolbox available.

Sir Peter Gluckman, our prime minister’s chief science advisor, has said that policy decisions which fail to take account of high quality information and evidence are less likely to be effective or efficient and can entrench policies which may be of little value. I agree.

At the heart of informed policy is an informed society.

We, as farmers, need a society who understands the value of science and its role in farming innovation and we need governments who are prepared to strike the right balance in promulgating regulation.

The world cannot wait.

Thank you.

Ends

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