New Zealand is big!

Tuesday 22 September 2009, 7:59PM
By Federated Farmers of New Zealand

New Zealand is big. Yes its not as big as Australia but our land mass is 67 percent the size of Germany’s, 72 percent of Japans and bigger than the United Kingdom. Our coast is longer than mainland USA and our economic zone of around 4.1 million square kilometers is the eight largest on the planet. Our skies give us abundant fresh water, our land fertile soils, and our total exclusive economic zone significant mineral resource. 


But the economic reality is that we are hanging onto the cliff face of first world status by our finger tips. It is the measure of a nation how it looks after its vulnerable.  If we are to climb that cliff face as a country, we need to face the fact that we must produce stuff and ideas to sell to the world to maintain our standard of living. We must better utilise and harvest our resources and we need to invest in and leverage productive assets, people and ideas.


Yes we do need to build on our core strength, agriculture. When we look at the diamond that is New Zealand, it is agriculture that sparkles brightest. But we can’t remain a one trick pony. Here are just four suggestions that could make a significant difference.


1. We need more big intellectual companies based here in New Zealand. While Fonterra is basically New Zealand’s sole multi-national, we’ve also had great starts based on agricultural intellectual capital in the form of the Glaxo in GlaxoSmithKline and Nufarm.  Both started in Palmerston North and turn over NZ$62 billion and $4 billion respectively.  But both are no longer based in New Zealand, suggesting our capital markets may lack some  depth and breadth. It’s not easy but we have to figure out how to keep these growing companies. There is no silver bullet but maybe the superfund could get involved here. 


2. Smart Water.  Every farmer knows he or she has a responsibility as custodians of our land and water resource as we harvest it for the benefit of New Zealand. Some have suggested that Australia is “the lucky country” but the reality is that New Zealand is very lucky  as well. We have fertile land, it rains, we grow grass and we turn that into food and fibre, which we sell to the world to pay some bills.It’s not that New Zealand is running out of water, it’s that water is running out of New Zealand. We need to harness and harvest it better. Allowing around 94 percent of the water that passes through Canterbury straight into the sea isn’t the greatest idea. We store water for the cities, why not more in the countryside? Ancient ccivilisations knew that water is the key to prosperity, to the environment and to happiness.  At our scale, the engineering challenge is relatively small compared to what those civilisations faced with the tools they had to hand.


MAF estimated that the last drought cost over $2.8 billion. Smarter water management and storage would provide increased productivity and productive capacity generating billions dollars, and is a recipe for success. We know from the Opuha dam and other schemes that the environment, recreational values, the economy and community spirit are all enhanced by using smart water storage strategies.  Every 1000 hectares of land irrigated creates 30 jobs and injects $7.7 million into the local economy.

With potential global warming, it will be those countries who have water storage infrastructure who will navigate though potential practical challenges the best. We have over 30 projects in the pipe line. It is imperative that they come to fruition. 


3. Broadband. Another hundred year solution we have pushed for is investment in broadband, rural broadband in particular. The potential to collapse the tyranny of distance, while enhancing productivity, production and income in the agricultural and other supply chains must be taken. Inventiveness comes second nature to farmers as Richard Pearce, Lord Rutherford and Bill Hamilton all demonstrate. Farmers will use broadband. Rural broadband is vital if we are to future proof the countryside, and maintain equity with urban New Zealand in education and health outcomes, while progressing social connectedness


4. Careful harvest of our significant mineral resources.  At the recent Australia New Zealand Leadership Forum in Sydney we were given the statistics that our top two exports to Australia were crude oil ($1.949 billion) and gold ($556 million). With the land mass and exclusive economic zone we have, we know we have more mineral resources, which we could harvest like Australia. Getting investment in exploration at sea is vital, as is the controversial decision to do a stock take of all our land based deposits. New Zealand has a very real prospect of building value from these resources on a global scale. While it goes without saying that it can only be done taking careful account of the environment and associated issues, there are some exciting projects that could contribute to bridging that standard of living gap with Australia and beating them at their own game.


In many respects we actually are a big county so we need to change our thinking. These are just four opportunities to build and convert some very real prospects into a reality of enhanced standards of living for all New Zealanders. Why wouldn’t we get on and “just do it”?  










Federated Farmers of New Zealand

Box 715, Wellington, New Zealand