An estimated 180 million hectares of GM forage and crops were grown last year and consumers were becoming more receptive to the technology when it improved nutrition or benefited the environment.
“The world has moved on and they are having a different conversation than we are having in NZ.”
Federated Farmers chief executive Graeme Smith said AgResearch had developed a GM pasture that provided livestock with more energy, required less water to grow and emitted less methane but NZ regulations meant it would have to be tested overseas and was likely to be lost to a competitor.
NZ had to decide its approach to this and several other challenges.
Proudfoot said a Netherlands company claimed that in 30 years its synthetically produced beef would satisfy all the world’s meat needs from the stem cells of just 30,000 cows.
In 2013 it cost $325,000 to produce 1kg of synthetic beef. Today it cost less than $12 a kilo.
A United States company was close to producing synthetic milk and another US company had developed a process that removed 50% of the sugar and all the lactose from milk and replaced it with protein, creating a drink for which it earned a premium.
Drinks giant Coca Cola had bought the company and an executive claimed the product would “rain money down on Coca Cola”.
In another challenge, a Chinese company was spending $100m building a cloning laboratory aiming to produce 100,000 cloned steers a year.
Proudfoot said the Australian government recently released a vision for its agricultural sector and NZ should follow suit so the NZ players were focused in the same direction.
He was in no doubt as to the target market he believed NZ agriculture should focus on – the world’s affluent.
To do that NZ needed to publicise its story to get close to consumers and to gain a competitive advantage by talking about the environment, how we farm and treat animals.
He said the target affluent market was massive but might buy high-quality NZ food only on special occasions.
"NZ should aim to feed the world’s most affluent 2-5% but exporters needed to understand those customers, what they wanted and expected."
Graeme Smith
Federated Farmers
Even with challenges from modified products there would still be room for premium, naturally grown food.
A NZ example of a company linking with consumers was Lewis Road Creamery. It identified a niche market, created a story and brand and now commanded premium prices.
To connect with those consumers required flexibility and an understanding of what they wanted.
“Not only are people eating things in a different way but they are eating different products.”
Contrary to popular opinion, many exporters were actively selling added-value products but competitors were quickly catching up and commoditisation of added-value products was accelerating.
“We need to look at niche markets that we can identify and gear a solution.”
On an international level he questioned the future of sending milk powder to water-short China when European dairy companies were air-freighting liquid milk to China.
“The reality is if a customer wants a product in a different format they will buy it.”
Proudfoot said farmers’ attitude to environmental management was changing but it needed to, from begrudging compliance because it was the law, to compliance because it was the right thing to do.
Equally, markets would look favourably on farmers who improved the biodiversity of their farms.
Smith believed NZ should aim to feed the world’s most affluent 2-5% but exporters needed to understand those customers, what they wanted and expected.
NZ needed not only to increase its spending on research and development but to free up governance and reduce what he called “micro management”.
Global multi-national food companies should also be encouraged to establish here, to take advantage of our resources because that would benefit producers.
