Most primary sector businesses were deemed essential and continued to operate during last year’s alert levels three and four, while also maintaining the confidence of New Zealand consumers.
But the pandemic has created what the briefing notes call “significant challenges.”
These include operation and production constraints due to safe operating practices, supply chain disruptions, falling and changeable demand across markets, especially foodservice, and the inability to access critical foreign workers.
The assessment is included in briefings to Primary Industries and Land Information Minister Damien O’Connor, Environment Minister David Parker, Forestry Minister Stuart Nash and Climate Change Minister James Shaw.
The papers warn the global recession will weaken consumer demand and soften prices affecting agricultural production and trade volumes unevenly, “with uncertain timing and magnitude.”
“Despite this uncertain and challenging outlook, the agriculture sector’s performance over the past few decades through several shocks and downturns suggests it will play a critical role to NZ’s economic resilience and recovery, as it has done previously,” the brief said.
The sector is on the road to becoming more environmentally sustainable and the Government’s focus needs to be supporting the implementation of land use practices to protect the climate, water, soil and biodiversity.
“Change is well underway within the agriculture sector, including on the focus areas of climate change and freshwater,” it said.
The briefing documents also reveal O’Connor faces further unspecified decisions on the operation of the Taratahi Agricultural Centre, which was placed in liquidation in December 2018.
Similarly, Parker faces decisions on the allocation of freshwater resources.
The size of the agricultural sector is also detailed.
Agriculture employs 283,000 people or one job in nine; sustains 60,000 enterprises; generates $40 billion in export revenue, which has grown at 4% a year since 2010, while occupying 26.8m ha, about half NZ’s land mass.
The dominance of log exports was graphically illustrated in the briefing on the forestry sector.
In 2009, 25% of forestry exports were sold as logs, and that increased to 55% in 2019, with China buying 80% of all forestry exports.
Domestic wood processing has remained flat with the number of mills shrinking from 252 in 2006 to 150 in 2019.
The area of new exotic forestry is increasing.
In 2019, 22,000ha was planted, equivalent to 0.3% of the area of sheep and beef land, with planting concentrated on several districts with cheap, less productive land.
“At a national level, afforestation is projected to continue,” the document stated.
“Under current policy settings, MPI projects between 0.74 and 1.46 million ha of additional afforestation out to 2050.
“This could offset between 26% and 51% of projected gross emissions in 2050.”
MPI director general Ray Smith warns forestry planting incentives have grown NZ’s carbon sink, but its role in meeting climate targets will become limited and still require economy-wide emission reductions.
Treasury is due to report on the effectiveness of 2018 changes to the Overseas Investment Act which streamlines the land purchasing process for foreign forestry investors, and a decision is due this year on whether to continue with the billion trees planting incentive programme.
Smith’s briefing singles out initiatives requiring further work such as the Sustainable Food and Fibre Futures fund, efforts to resurrect the use of strong wool, working with Maori, growing trade, the He Waka Eke Noa agreement to cut agricultural greenhouse gases, and emissions trading and action on freshwater.
The briefing on rural communities states that the 2017 reintroduction of the Rural Communities portfolio has increased the scope of MPI’s commitment to primary industries to include a rural proofing policy lens when considering Government policy.
MPI is reviewing the rural proofing policy and will report to Cabinet in June.
Also in June, MPI expects to complete a review into recovery assistance decisions for farmers following climatic events, natural disasters and biosecurity incursions.
Two rural community policies that will be a focus are improving internet connectivity and support for mental health and wellness.
The briefing document acknowledges communities will need additional help from the effects of land use change which could lead to the loss of jobs, services and social cohesion.
“There is an opportunity to work with and alongside rural communities to identify how community aspirations for the future can be realised,” it said.
“Identifying what matters to each community allows us to respond to challenges by considering specific mitigations, including potentially publicly-funded investments.”
The Crown Pastoral Land Reform Bill, which will end the tenure review of Crown Pastoral Lease Land, is still before a select committee.
The briefing from Land Information NZ (LINZ) says if the bill proceeds and tenure review is ended, a consequence will be that the Crown will be a long-term owner of 1.2m ha of the South Island and landlord to 165 pastoral lessees.
