In National Fieldays week the Situation & Outlook for Primary Industries (SOPI) forecasts the farm gate contribution to Gross Domestic Product (GDP), by the Primary Industries, will grow by almost 67 percent between 2009 and 2016.
“While the 2012/13 season will not be stellar it reflects the world economy and is a common theme among almost all exporters, “says Dr William Rolleston, Federated Farmers Vice-President.
“Despite this the near term outlook seems overwhelmingly positive. Soft commodities have experienced rapid appreciation over recent seasons and with the global economy cooling, a price correction has been expected.
“We have not been alone in advising our members to plan for lower gross revenues in the short term. Our advice is to budget conservatively and watch costs closely.
“The good news is the continued growth coming out of China, India and major economies in Asia and Africa. We are well positioned because as they continue to grow, their populations will increasingly demand a higher protein diet.
“This is why Bruce Wills has been overseas at the World Farmers’ Organisation (WFO) congress. By getting trade on the WFO agenda we will not only help to meet the needs of a growing world population but our economy too.
“I believe it explains why primary industries at the ‘farm gate’ are forecast to grow their contribution to GDP by almost 67 percent between 2009 and 2016; from $7.3 billion in 2009 to $12.2 billion by 2016. Value added processing of course contributes much more than this.
“Another thing from SOPI is that around 58 percent of everything a farmer earns at the farm gate goes on buying what they need to farm with. This ‘intermediate consumption’ is undoubtedly a major driver of our provincial economies.
“Yet as Beef+Lamb NZ highlighted last week, with its input prices for sheep and beef, we have seen the cost of farm inputs rising well above inflation. Prudence is the key word for suppliers and for all levels of government.
“It is why Federated Farmers membership is vital. We are the only farmers’ organisation to submit on every council plan affecting pastoral agriculture.
“Overall, the potential for our primary industries is immense. SOPI reinforces the need for our primary industries and the biological economy in general to have the infrastructure to grow value, markets and products.
“Take the case for ultra fast rural broadband. This is important to transform business models, transfer technology and to lower the cost of production.
“We also feel SOPI provides strong evidence to improve physical connectivity with and between our sea and airports. This means not only road and rail but coastal shipping too. It is about improving our physical access to market.
“SOPI shows how we have the economic bones from which to cluster a whole series of existing and new value adding industries around our primary industries,” Dr Rolleston concluded.
The 2012 Situation & Outlook for Primary Industries is available by clicking here.
For Federated Farmers at Fieldays come to Site F39, for a map, please click here