The Country - August 2020

Issue 6 | Monday, 24 August 2020

THE

COUNTRY

The innovation edition Are we innovating or improvising?

Understanding the innovation issue

NZX analyst Julia Jones asks the question

Now is the time to develop the right people

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Issue 6 | 3

Are we innovating or improvising?

Julia Jones asks the question: do o we really innov vate in New Ze ealand – or have e we simply ma astered the art of improvisation?

D

ew Zealand or o we really innovate in Ne have we simply mastered d improvising?

To improvise is to solve a single and novate is to immediate problem; to inn anticipate multiple future problemss and create a potential solution.

One isn’t better than the other, itt all comes down to what you are trying to achieve, matching impact with intention.

Global innovators Innovation is scalable because it’ss likely to solve a global problem rather than a backkyard problem. It creates the centre of an ecosystem ms universe for others to connect to. his. They created a Xero is a fantastic example of th platform that others create (improvvise) solutions that attach to this universe. The difficulty with innovation is, you are predicting future trendss and it takes time, commitment, energy and investme ent – both financial and emotional. h; however, the These factors make the risk high rewards are exponential when it works. For example, Xero’s current market valuation is circa AU$13 billion; they employ 3000 people.

Innovation also tends to drive a significant transformation and is a disruptor rather than a response to disruption. Like Xero, Allbirds is a great example of this; their innova ation significantly disrupted the global multibillion-do ollar recreational shoe industry and they scaled quic ckly to a market valuation of circa US$1.4 billion an nd source wool for their shoes from New Zealand.

Improvising is still awesome, it creates solutions for an immediate specific problem m and forms an important part of the innovation su upport network, given it is so specific in nature it’s often difficult to scale and limits its financial growtth.

An example of this is Cash Mana ager Rural (CMR).

A fantastic system that helps farm ming businesses record and measure their financia al activities, it is loved by many.

CM MR’s purpose is specific to New Zealand fa arming and cash accounting. In its current form, it make es it difficu ult to scale up or take global. Improvisation n also often tends to be a response to disruption, making the solution clear and immediate; time frames are shorter and as a result, risk is often less and rewards lim mited.

Thinking global to strengthen local New Zealand leans heavily towards improvisatio on. I believve the reason for this is because we are ha arsh on those e who fail or rarely succeed; this drives mid ddle-ofthe-ro oad thinking.

Suc ccess has often come from safety in the ‘he erd’; if you u break away from the herd it can make it ve ery difficu ult to get funding and support to scale. This is seen by many of our start-ups seeking financial and scalin ng support offshore.

Don’t get me wrong, we should be proud of our drive to improvise, it’s kept things moving forward for generations, but we need to think global and to truly benefit local we need more innovation.

Innovation takes great courage. You need to be able to acc cept that you will most likely have momentss in the journe ey when you fail, and when you do, you ne eed the vision n to pick yourself up and take that learning forward.

We e also need the courage to succeed, be super aspira ational and not settle for ‘just enough’. The more we ca an innovate to scale and grow value, the more peop ple we can employ, the more people we can n engage in the success, the more we can reinvest in our comm munity, environment and the stronger an ec conomy we ca an build.

Suc ccessful scalable innovation is extremely good for Ne ew Zealanders and something to aim for, not be afraid d of. It’s not about being greedy and buildin ng one individual’s wealth; it’s about building and lifting g the wellbeing of New Zealand.

As the country’s focus shifts to transformation n and rebuilding a strong economic future, we need to o ask ourse elves: will improvising really be enough?

Julia Jones is Head of Analytics at NZX and a former KPMG farm enterprise specialist.

Contents 4 7

Understanding the innovation issue

Now is the time to develop the right people

Kiwi innovation at the heart of Fieldays Online The 2020 Fieldays Online Innovation Awards

As the country’s focus shifts to transformation and rebuilding a strong economic future, we need to ask ourselves: will improvising really be enough?

9 10

12 Let’s get inventing Novel ideas for New Zealand’s would-be innovators

Farm vehicle accidents: why it won’t be right The ‘she’ll be right’ attitude is no longer good enough

16 18

It’s all about the rogue bees Why ‘rogue bees’ are crucial for the future of agricultural finance

Focusing on the game The double-whammy being asked of farmers

Beef genetics add value to dairy beef Beefing up the value chain with the right genetics

THE 4 | Issue 6

COUNTRY

Understanding the innovation issue Statements about the need for innovation and creating enabling regulation have been made for years, says Jacqueline Rowarth, but now is the time to develop the right people with the right mindset to take New Zealand into the future.

‘I

nnovate or die’: the catchphrase of the 21st century.

Books have been written using the title. Seminars have been given. Programmes have been instigated.

Performance reviews include it and recruitment includes questions on the ability to ‘think outside the box’.

Innovation. Stay ahead or become yesterday’s news.

Or toast…

Since May, Professor Sir Peter Gluckman’s Koi Tu document, KPMG’s Agribusiness Agenda and the Ministry of Primary Industries’ Fit for a Better World have been published, and all used the term repeatedly.

The reports emphasised the need for innovation to develop new markets for new products and allow reinvestment in education, science, more innovation and development.

MPI’s visionary document included recognition that key regulatory systems need modernisation to support innovation, increase efficiency and remove complexity while managing risk.

Excellent. But similar statements about the need for innovation and creating enabling regulation have been made for years.

The reorganisation of the science system didn’t have the desired effect. Nor did the ongoing changes in the education system nor the MRST/FRST/MSI/MBIE funding system. The RMA hasn’t been the enabling document Sir Geoffrey Palmer envisaged.

Over the years, compliance has escalated, paperwork has burgeoned… and more time spent on ticking boxes for regulatory matters means less time thinking about what might really make a difference.

Leader or follower?

Innovation. Without innovation, New Zealand is doomed to be a follower, kilometres away from markets and with higher costs of doing business than other countries because of distance and regulatory compliance (Occupational Health and Safety and Environmental, in addition to industry specific factors such as food safety and animal welfare).

Since the late 1980s, the primary sector in New Zealand has been off the boil. Certainly, there have been advances, but the precautionary principle has led to stagnation in some areas of research (gene technology, for instance) and many good scientists have been lost to overseas laboratories.

A big part of the problem has been a focus on process rather than outcome, which in itself is a product of a State Services Commission report in 2003 that people management skills were of more importance than discipline knowledge.

In 2010, over half of policy advisory staff who responded to a Treasury survey had a background in political studies or economics; 14 percent had a background in public policy and the rest had studied law or humanities. There were no policy analysts with qualifications in science or engineering. Health and agriculture were mentioned only as ministries.

The Treasury report, which mentioned the word ‘management’ 180 times in 122 pages, went on to suggest that policy capability required more than generic skills in policy, it also required professional knowledge and subject specific knowledge.

New Zealand is not alone in the trend towards managerialism, but we could be ahead in innovation if flexibility allowed new thinking.

What’s needed to be innovative?

Management guru Gary Hamel has explained what is required to be innovative as a company. Fundamental is employing people who have been taught to think like innovators, who challenge invisible orthodoxies, harness unappreciated trends, leverage embedded competencies and assets and address unarticulated needs. Innovationfriendly management processes are also required.

And the foundation of progress is understanding the context of the industry in which the company is operating.

When it comes to regulation derived from policy, the same applies. MPI has recognised the need for ‘modernisation’, but without the appropriate people who understand the issues, modernisation will not have the intended outcomes.

Gary Hamel has pointed to the need for the innovator mindset, but education globally has not been encouraging questioning and analysis. Professors at America’s top universities made the problem abundantly clear in an open letter to new university students in 2017.

The letter urged the students to “take the trouble to learn and honestly consider the strongest arguments to be advanced on both or all sides of questions in order to decide what they believe ... Don’t be tyrannized by public opinion. Don’t get trapped in an echo chamber. Whether you in the end reject or embrace a view, make sure you decide where you stand by critically assessing the arguments for the competing positions”.

Knowledge is vital Critical assessment, taking initiative, and asking questions rather than More time making assumptions, is paramount in spent on ticking developing innovations. The principles apply whether those innovations are boxes for regulatory in products and services, processing, matters means less time marketing, organisation or business models. At the heart of all is thinking about what knowledge of the issue. might really make a During his time as Prime Minister’s Chief Science Adviser, Professor Sir difference.

Peter Gluckman established chief science advisors at most of the ministries. What is needed now is more people in those ministries who are more than career policy people – who actually have a discipline qualification aligned with the focus of the ministry.

This has implications for the education system. Graduates need to have the ability to analyse information and data in order to be able to inform decisions, as well as integrate multiple perspectives in order to enable change.

Developing the right people with the right mindset will create the workforce of the future, whether on the land or in the cities, and people who innovate from a platform of knowledge will take New Zealand into the future.

Dr Jacqueline Rowarth is a farmer-elected director of DairyNZ and Ravensdown. The analysis and conclusions above are her own. jsrowarth@gmail.com

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Issue 6 | 7

Kiwi innovation at the heart of Fieldays Online The best of Kiwi innovation was recognised at the 2020 Fieldays Online Innovation Awards, which were announced digitally in late July.

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roving that New Zealand is the land of both milk and honey and advanced agritech, the recent 2020 Fieldays Online Innovation Awards ranged from better beekeeping to biodynamic fertiliser to colostrum management.

The Fieldays Innovation Programme provides an excellent opportunity for ingenuity, for big and small companies to get support, recognition, insight, and commercial expertise to grow and move to the next level.

A good buzz Judges were buzzing about multi-award winners Hivesite. The Waikato based inventors scooped up the Grassroots Prototype Award and the James & Wells Innovation Award with their in-beehive autonomous, chemical-free, thermal treatment for Varroa mite.

For their Grassroots Prototype Award, judges were impressed by the use of technology to enable an efficient and innovative and self-contained system that uses heat to kill Varroa without the need of pesticides.

“The product has been proven in field trials and we liked the sensible decisions related to essential and non-essential functionality and add-ons that will increase the likelihood of a successful commercial product,” they noted.

Regarding their James & Wells Innovation Award win, judge and patent attorney at James & Wells, Jason Tuck, said: “As well as providing a non-chemical approach to addressing the Varroa mite problem, a critical issue for apiarists both home and abroad, I was impressed by the potential for added-value through applications enabled by the technology which extended beyond the core purpose.

“Hivesite also demonstrated an awareness of the IP in their offering and the need to secure ownership as part of their business strategy.”

Commercial colostrum Winners of the Innovation Launch Award, Antahi Innovations, wowed the judges with their Trusti Colostrum Management System.

The practical system is used for testing, storing, feeding and pasteurisation. Judges noted that the product was well thought out.

“Each component is clever in its own right, but together make a compelling solution. Trusti Colostrum addresses animal health and welfare needs and helps to set calves up well for life. It offers an exciting commercial opportunity worldwide for this New Zealand-based business.”

Waikato veterinarian and chief innovator at Antahi, Ursula Haywood, was thrilled to win the award.

“It is exciting to see our new colostrum management system adopted so quickly by our progressive farmers here in New Zealand. We look forward to helping many more farmers manage their crucial gold colostrum for their future herd.

“The Fieldays Innovation Awards will not only help spread the good word domestically but will also strengthen our exports.”

Fertilisers and pesticides In the field of biological and sustainable fertilisers and pesticides, Ecolibrium Biologicals’ entry ‘Lateral’, a safe and effective biological pesticide for the control of caterpillars in various crops, took the top prize for the Callaghan Innovation Partnership and Collaboration Award.

Ballance Agri-Nutrients’ SurePhos, an effective, sustainable phosphate that reduces phosphate loss by up to 75 percent compared with superphosphate, claimed the Innovation Launch Award Runner-Up position.

The Established Prototype winners, Agrisea, impressed the judges with their innovation BioactiveN. The bioactive formulation reduces urinary nitrogen and increases animal performance.

Judges noted that the innovation “addresses the reduction in nitrogen-related pollution in a novel way by utilising a feed additive that enhances the ability of a cow to metabolise nitrogen ingested, such that more is used and up to 18 percent less is present in the animal’s urine.

The judges see this as a valuable addition to agricultural nitrogen control.”

Rollover warning and robotics As usual, digital innovation was central to the awards. Fleetpin’s Rollover Safety System won the Amazon Web Services Innovation in Data Award with their rollover warning and critical alerting system designed for quad bikes, side-by-sides, and other farm vehicles.

Judges said the product was “a good use of real-time streaming data and analytics being used to send alerts, that could save lives”.

In the robotics field, the MSEVEN, a remotecontrolled fully electric rover that measures yield and dry matter was highly commended in the Innovation Prototype Award.

The judges noted the dramatic improvements from entrants AgResearch’s original concept in 2019.

“The capabilities, size and method of operation it now provides has turned a prototype proof of concept into what we believe to be a viable product that enables it to have a real and positive impact on its target market.”

Save the dates for Fieldays 2021: 16-19 June.

THE 8 | Issue 6

COUNTRY SPONSORED CONTENT

ACC overcharging The kiwi company putting money back in the pocket of business owners and the self-employed.

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s anyone running their own business will know, invoices come in On average, over a third of those who seek advice from ACCelerate thick and fast but trying to get money you’re owed can be slow and are entitled to a refund. With an average $618 refund per case and a ‘no painful. refund no fee’ promise, more and more people are jumping online for an ACC levies are part and parcel of being self-employed or running assessment. a business and many people don’t stop to question the amount they’re Far from being a convoluted process, ACCelerate has created a bespoke charged, resulting in widespread overpayments to ACC online tool that provides the sort of fast and easy experience people expect Pinpointing when this has happened and getting that money back is from a seasoned financial service provider. something Richie O’Meara, Director and Shareholder of ACCelerate, is As a business owner and chartered accountant himself, O’Meara knows that time is money. passionate about.

“By entering a few basic details into our online tool, you’ll be able ACCelerate is New Zealand’s only dedicated ACC refund to get an idea within seconds whether you might qualify for a specialist. Operating under a ‘no refund no fee’ policy, the kiwi refund or not. Its the sort of thing you can do over a cup of owned and operated company prides itself on ‘having the Farmers are coffee - its that straightforward.” back’ of business owners and the self-employed.

And its a method that’s found favour with timeOver the past five years, ACCelerate has reviewed a hard-working poor farmers who’ve been quick on the uptake, over 40 thousand ACC accounts, recovering over $8 bunch who often representing over half of all refunds secured. million in refunds for clients all over New Zealand.

O’Meara points out that due to the nature and According to O’Meara, ACC calculations are don’t have time to work fluctuations of their work, farmers are prone to incredibly complex and processes are computer overpaying, and those who are now retired from through the detail of every driven which can lead to mistakes. working in the agriculture industry are even more “Tax and compliance requirements can be invoice they receive, so likely to receive a refund. confusing, misleading and onerous. Coupled “Farmers are a hard-working bunch who often having someone to take together with the day-to-day reality of running a don’t have time to work through the detail of every business, means that for a lot of people, examining care of this for them is invoice they receive, so having someone to take care their ACC payments has never made it to the top of their of this for them is something they really appreciate.” something they really ‘to-do’ list.”

For one southern client with a fluctuating income, The thought of chasing money from a government appreciate.” getting ACCelerate on board was a wise move. department is enough to send a shiver down the spine of “My company runs a farming business in Otago. We paid most people, particularly when they have a lot on their plate.

ACC cover that wasn’t required resulting in an ACC overpayment “We understand that people are busy,” O’Meara says. “We take the of $1,410. We assumed ACC would have refunded us but they didn’t. hassle out of dealing with ACC and make sure you’re paying the right amount ACCelerate identified where I had been overcharged and obtained the and not a cent more. Being able to go back up to 12 years means we can ACC refund.” take a thorough look at what refunds may be there. We also guarantee that This story echos the sentiments shared by other clients whose no review by us will ever result in additional ACC invoicing costs.” testimonials feature on ACCelerate’s new website.

“I work in the fishing industry on the West Coast and have paid a hefty amount in ACC levies over the years,” another client said. “I never realised that ACC could get their invoicing wrong. Getting an ACC refund made a real difference to the bottom line of my business.”

Its this sort of feedback that motivates Richie O’Meara.

“Its a fantastic feeling to know we’ve played a part in putting money back into the pocket of our fellow kiwis. Business owners and self-employed people work incredibly hard to get ahead so if we can make things a little bit easier and get a result that benefits them financially, its a win-win.”

When all that’s required is a visit to ACCelerate’s website for a no-obligation, free check, the team at ACCelerate can expect to see plenty more business owners and selfemployed people heading their way.

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Issue 6 | 9

Let’s get inventing

Glenn Dwight leads the way with some novel ideas for New Zealand’s would-be innovators.

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f the Olympics were currently happening, as a nation we’d be rolling out lines like “we’re punching well above our weight” and “medals per capita, we’re number one”.

And when it comes to inventing, that’s also our attitude, but Kiwi Bronze (fourth place) isn’t where we should be aiming; why are we not number one?

We have been in the past; I use the electric fence and cheese roll as just two examples of our fine pioneering history, but we’ve taken our eye off the ball, and maybe even dropped it (luckily it went backwards out of the hand).

So come on New Zealand, it’s time to get back on the inventing horse!

A few tips

good at it. We love utes, we love swimming; why not combine the two and create a ute tray liner that converts your ute to a mobile pool?

This next invention has one or two glitches, I admit, but as a man, and I am sure there are woman who will agree with me, why can’t we have a gift wrap spray can?

Forget struggling with awkward corners and wrapping a bike at Christmas, just pull out your trusty can of ‘Christmas wrap in a can’ and hours of wrapping hell are over!

This next one is more an encouragement to the groundwork done by Sir Woolf Fisher and Maurice Paykel; these two gentlemen did a great job with the washing machine, but why did they stop? Why not keep on moving and create a washing, drying and folding machine. Even a hanging-up machine – I have been told from a young age that clothes don’t magically hang themselves up, so why has this not been fixed?

Just throw them While on the appliance tangent, where is the ‘cold-o-wave’ (working title)? Very similar to the microwave, but completely in the ‘cold-o-wave’ opposite. Your mates come over and you only have warm (working title) for 30 beers? Easy! Just throw them in the ‘cold-o-wave’ (working title) for 30 seconds and you have perfectly chilled beer seconds and you have ready to drink. Honestly, how is this not a thing? And sorry, perfectly chilled beer “we don’t have the science” is not an excuse.

Now I don’t have the technical skills to actually invent anything, but like a sideline parent I can encourage and yell advice, welcome or not. So here are a few thoughts that just might ignite that innovative spark in New Zealand.

My first is rather obvious and might be more a frustration at the pace of development, but as a child who grew up thinking Back to the Future was like a portal into the future, hoverboard development appears to be far behind what Doc and Michael J Fox promised ready to drink. Honestly, Placing the innovation peg me. how is this I know there have been some developments and I Anyway, my point is that we are a country of great inventors have seen Tony Hawk awkwardly stand on one of these and we can and should be leading the world. So while we sit not a thing? here wondering how to fix the hole in the economy that was and move marginally left and right, but by now we should tourism, why not use a big innovation peg? Those of us who be skimming across fountains and avoiding traffic with a have watched Apollo 13 know that it’s possible to put a square peg belligerence towards vehicles tethered to the ground. into a round hole and make it safely back to Earth.

We Kiwis love cars, utes and SUVs, so why are we not leading the way in automotive innovation? The Trekka was our last giant leap NZME Creative Director Glenn Dwight is currently working on a patent for ‘Christmas wrap forward in the automotive game and if anything, this proved that we are bloody in a can’ – watch this space.

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THE 10 | Issue 6

COUNTRY

Simple actions saving lives Kiwi farmers are speaking out to ensure their farming compatriots get to enjoy their hard-earned retirements, reports Rowena Duncum.

Those most at risk are farmers nearing retirement.”

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round the globe, beautiful yet haunting works of art represent chilling statistics.

Seven thousand pairs of shoes were placed on the White House lawn in 2018 to signify the US children who died from gunshot wounds at the 2012 Newtown Elementary School massacre.

Last month 164 pairs of shoes were placed on the same lawn – one for each of the nurses struck down by Covid-19 in the US. Here in New Zealand, 185 white chairs stand empty in tribute to those who perished in the February 2011 Christchurch earthquake. A 10-minute walk away, Tu-ranga, the main public library, currently houses the Children's Holocaust Memorial – a clear box filled with 1.5 million buttons, collected by students from Moriah School in Wellington, each button representing a child killed by the Nazis between 1939 and 1945.

Perhaps the most universally recognised and iconic are the thousands of white crosses and poppies adorning cenotaphs around the world on ANZAC and Armistice Days.

All are tangible, poignant reminders of those taken from us too soon.

Stark NZ farming statistics But what’s not obvious anywhere are the 164 men, women and children who’ve lost their lives on New Zealand farms or in agriculture, forestry and fishing accidents in the past nine and a half years.

In the first half of this year alone, that figure stands at 15. That’s 15 pairs of gumboots standing empty on the porch, or 15 pairs of overalls left hanging on a peg; 15 empty pillows; 15 people desperately missed by families and friends.

At one stage, the count was six for eight – six lives lost on farms, just eight days into 2020.

Everyone talks about six degrees of separation but, in the farming fraternity, it’s more like one or two degrees – they all know someone, or know of someone, who has died or been injured.

These events leave entire communities reeling.

What this figure doesn’t take into account are the instances of serious harm – those who’ve lost a limb, their sight, their hearing or their ability to move again. Lives not lost, but forever changed.

farmer is alone – and the farmer actually dies alone. That’s really scary.”

The other simple action which could save lives is putting on a seat belt. Most tractors, side by sides and farm utes are fitted with these, as are crush protection devices.

“If we do those two things…two really, really simple things, we could actually drop that fatality and serious harm incidence by [at least] 50 per cent.”

Preventable incidents

Those most at risk are farmers nearing retirement. WorkSafe statistics show the average age of a farmer dying in a farm vehicle accident is around 57.

“So, you’re getting to the tail end of your farming career. You’ve worked really, really hard, and you don’t get to go and celebrate with your grandchildren, at the bach, on the boat – it’s a life-changing event [for everyone].”

Things are changing for the better, as farmers speak out and share not only the tragedy of their losses but also their mishaps – an attempt to prevent others from experiencing a similar fate. Many are saying: “If, by speaking out, I can prevent just one family from going through this, it’s worth it.”

That’s worth 10 ‘she’ll be right’s’ any day.

Because it won’t be right until those statistics start trending down.

Trawling through WorkSafe data is sobering reading. The classification most prevalent?

Vehicle incidents, with farm bikes and tractors leading the charge – things we hop on and off multiple times a day; things we often operate in ‘autopilot’ mode.

Sadly, the old Kiwi ‘she’ll be right’ attitude has a lot to answer for, as does ‘good enough is near enough’ and ‘it could never happen to me’.

According to WorkSafe’s Brent Austin, many vehicle accidents are preventable: “What we know is that we could actually reduce serious harm incidences and fatalities by at least 50 per cent, if we do two simple things.”

One is using a crush protection device retrofitted to a quad bike. There are a few different types to choose from; ACC provides a subsidy for that.

“If the quad bike does roll over, it could actually save your life. It also means that you can get up and keep farming and I think that’s something that really needs to be focused on – it can lessen the impact,” says Austin.

“Normally when a quad bike rolls over, the

Older farmers most at risk

C

Join Rowena every weekday with Jamie Mackay on The Country 12pm on NewstalkZB, Gold and Hokonui.

Back Your Regions. Back Your Future. Back New Zealand First.

For the last 3 years New Zealand First has used it’s vast experience to bring stability in Government to help overcome unforeseen crisis and tragedy. $3bn Provincial Growth Fund that is working to grow our primary industry, support business growth, address infrastructure gaps, fund training and employment initiatives and connect the regions to the cities and the rest of the world. $229million sustainable land use package to assist farmers and rural landowners as part of the solution for better environment outcomes.

Won exemptions for semi-automatic firearms for farmers for pest control and called on the Department of Conservation to work with hunters on Tahr control.

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THE 12 | Issue 6

COUNTRY

It’s all about the rogue bees Scott Wishart, Managing Director of NZAB, explains why ‘rogue bees’ are crucial for the future of agricultural finance.

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came across this the other day: “A company pursuing only profit but not considering the impact of its profit-seeking upon customer satisfaction, trust or long-term resilience, could do very well in the short term, but its long-term future may be perilous.”

There is a parallel in the behaviour of bees and the system they have evolved to collect nectar and pollen.

Although they have an efficient way of communicating about the direction of reliable food sources – the waggle dance – a significant proportion of the hive seems to ignore it altogether and journeys off at random.

In the short term, the hive would be better off if all bees slavishly followed the waggle dance, and for a time this random behaviour baffled scientists, who wondered why 20 million years of bee evolution had not enforced a greater level of behavioural compliance.

However, what they discovered was fascinating: without these rogue bees, the hive would get stuck in what complexity theorists call ‘a local maximum’; they would be so efficient at collecting food from known sources that, once these existing sources of food dried up, they wouldn’t know where to go next and the hive would starve to death.

R&D function So the rogues bees are, in a sense, the hive’s research and development function, and their efficiency pays off handsomely when they discover a fresh source of food. It is precisely because they do not concentrate exclusively on short-term efficiency that bees have survived so many million years. If you optimise something in one direction, you may be creating a weakness somewhere else (source: Rory Sutherland).

When I first read it, I thought, ‘this sounds like banks!’

But after reflecting, its actually all of us in the agricultural sector.

For as long as rural banking has been around, we’ve all been stuck in a ‘local maximum’. We became incredibly efficient at going to the banks and getting funding for whatever we required. That food source is now drying up, and we haven’t been sending out enough ‘rogue bees’ to find other sources.

So, what should the rogue bees be looking for? What does the future of agricultural finance look like? Find out on the next page.

Get ready, change is coming and it will create real opportunities for those businesses who deserve it.

The question then becomes: are you one of those businesses?

THE

COUNTRY

Issue 6 | 13

–

1. The length of the loan will match the asset being funded The longest you can get a term loan for at the moment on your farm is on average about three years, which is crazy really when your intent when purchasing is decades. It makes no sense to reapply for your loan every couple of years, when you’ve clearly articulated your intent to own the farm for a long time.

Conversely, why would you add finance for a tractor to your interest-only loan? You’ve got to pay that off to ensure you have the ability to buy the next one.

Loans of the future will focus on specific assets and have terms and repayment structures to match the underlying assets, not the short-term strategies of the funder. Imagine a funding structure with a 30-year interest only for your land and then amortising things like infrastructure and plant?

2. Having different assets funded with different financiers will no longer be a sign of weakness, it will be a sign of strength Over the years we have come to view the use of non-bank finance as something that you only do if the bank doesn’t come to the party. But that will change.

There’s a lot of innovation happening in the finance space, and newcomers with a specific strategy to focus on niche parts of the industry will ultimately do a better job of understanding needs and funding them than a generalist funder.

They will also do a better job of understanding the real risk associated with these loans, and so won’t be overly expensive.

3. Finance will be automated, but not at the expense of people

6. Farmers will be rewarded for their performance and ability to execute on strategy

Ag tech innovation is everywhere. Finance for simple items will become automatic. There will be tools that will link on farm decisions to finance in a much more streamlined manner.

Things like buying stock will trigger the finance required and selling stock the repayment. The ability to present a plan to these systems will be the key skill set of the future banker or advisor.

More than ever it will be critical that farmers own and understand their strategy, performance, and funding requirements. Those that can, will be able to access endless finance opportunities on terms and conditions that work for them.

You will need a highly skilled team around you that ensures you navigate this in order to get what you deserve

4. Finance will focus on farmer need, not financier need

7. Finance will be harder to get and maintain for serial poor performers

Financiers will be increasingly interested in farmer strategy and developing innovative products to serve those needs. They will be nimble and proactive and reliable.

We will see an active desire to understand and solve problems for farmers and create solutions that unlock potential in their businesses.

5. It’s not just about the numbers anymore, environmental and social impacts will be significant lending considerations It is becoming increasingly important that lenders understand the environmental and social impacts of their lending decisions. We are also seeing more and more that investors are looking for ‘green’ investments and that they are happy to accept a lower return when they are investing in genuine world class businesses.

That creates a huge opportunity for New Zealand agriculture to demonstrate our skill in this area and attract cheaper funding on the back of it.

Farming is a biological system, and we all get that things can change, but finance of the future will be able to look through these uncontrollable events and determine how well you as a farmer have responded to change and challenge.

The flip side of the best performers getting better deals is that the worst performers will be worse off.

8. The main trading banks will still be the cornerstone of our finance industry While it might sound like the future of finance isn’t with the banks, that couldn’t be further from the truth. The future for the banks is one where they have a really clear handle on the risks they fund, along with loan products and terms to match.

We will see some really positive changes that come out of the banking sector as innovation drives competition.

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Rabobank is a bit different, actually, very different.

We should explain.

You see, there’s two sides to what we do.

Growing a better New Zealand together

First up, we’re a bank that lends money to New Zealand’s farmers and producers, and we work with those rural businesses to help them be more successful, resilient and sustainable.

That’s one side.

At the same time, all New Zealanders can join us as an online savings bank to earn interest and, just as importantly, know that your savings will help us create more successful, resilient and sustainable rural businesses.

We’re bringing town and country together.

Find out more at www.rabobank.co.nz

Growing a better New Zealand together.

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RAB0022

NAIT ready for calving?

Make sure you can tick off the following:

Bobby calves moved direct to slaughter are exempt from all NAIT requirements.

Check with your meat processor about their requirements for accepting bobby calves.

Selling calves: All my calves are NAIT tagged correctly I have registered the calves in my NAIT account – after tagging them first I have recorded a movement in NAIT for the calves I sold – within 48 hours of them leaving.

Note: This is not required when selling to a saleyard.

I’ve filled out an ASD form and have a Declaration to Livestock Transporter (DLT) form ready – if required

Buying calves:

Failure to comply with NAIT obligations may result in fines or prosecution issued by the Ministry for Primary Industries.

I’ve checked the calves I bought are tagged and NAIT registered I received an Animal Status Declaration (ASD) form from the seller I have recorded a movement in NAIT for the calves I bought – within 48 hours of them arriving I’ve updated the calves’ production type to beef – if brought in from a dairy farm.

NAIT is an OSPRI programme

Need help? Call OSPRI on 0800 482 483

info@ospri.co.nz | ospri.co.nz

Thank you, farme T me ers. ers

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Here for farmers.

THE 16 | Issue 6

COUNTRY

Focusing on the game Doug Edmeades asks why farmers are now being asked to simultaneously rescue the country’s economy and clean up the environment – and explains why everyone will lose if this continues.

T

he New Zealand Labour government has spent about $50-odd billion to date to counteract the ravages of the Covid-19 virus. It is an enormous debt and somehow, someday, we must repay it. But how?

Unfortunately, our tourist industry is also a casualty of the virus. This leaves agriculture as the only industry large enough to muscle-down this debt over time.

It is assumed, but not made explicit, that this is the reason behind the government’s recent ‘Fit for a better world’ policy to boost primary industry exports by $44 billion over the next decade.

Interestingly, this sounds like an echo of the National Party’s 2013 aspirational goal set for the pastoral sector, to increase productivity by 50 percent by 2025.

So once again, in desperation, the nation turns to agriculture to earn its place in the world.

Historically, there is nothing new in the fact that farming is the metaphorical backbone of New Zealand. But things are different this time round.

Farmers are being asked to rescue the country’s economy and at the same time clean up the environment.

High-cost policies This government, despite the financial burden it is now placing on the farmers shoulders, appears to be hell-bent on simultaneously pursuing its environmental goals – the Emissions Trading Scheme (ETS), the Zero Carbon Bill (ZCB) and the Freshwater Reforms.

How about cutting agriculture a little bit of slack? How about setting aside our environmental goals for a time while we come to grips with the national debt?

These are all high-cost policies. Examples include the ZCB, estimated to cost $85 billion per year if fully implemented. DairyNZ estimates that the proposed Freshwater Policy will cost the dairy sector $6 billion annually. Plan Change One, proposed to clean up the Waikato River, will by some estimates, cripple the regional economy.

The billions of dollars that the government has poured into the Covid-19 crisis have been justified on the grounds that ‘we live in exceptional times’.

Fair enough. But surely these ‘exceptional times’ should be extended to the agricultural sector.

How about cutting agriculture a little bit of slack?

How about setting aside our environmental goals for a time while we come to grips with the national debt?

I would have thought that there was great urgency to deal with the debt and that there would be little harm in leaving the environment to look after itself for a while. This would set farmers free to fully concentrate on what they do best and what the nation most desperately needs – export dollars.

This will not, of course, sit well with those of the green persuasion. But should we care? Even in unexceptional times, they would gladly see agriculture wound down to a peasant industry.

Secondary issues The sporting analogies are obvious. We are a team of five million, most of whom are powerless to do anything about our national economy except keep the internal economy turning over.

We are now dependent on the members of the team who can make a difference – the 60,000 farmers – to pay back the national debt.

The nation needs them to be focused on the game and not diverted by what are, at the moment, secondary issues. By continuing to pursue our environmental goals in these ‘exceptional times’ is like handicapping the horse out of the race.

Everyone loses, including those making up the team numbers. I’m sure that they will not miss out on their favourite swimming hole and will always have clean water to drink as we sort out a national debt.

Remembering Sisyphus In these exceptional times, to yoke the farming horse to a swingle-tree, hitched to the competing goals of productivity and the environment, is unfair and illogical.

I am reminded, as we struggle to find a balance between economic and environmental goals, in these exceptional times, of the mythical Greek character Sisyphus. He was a good dude but he had pissed on some important people.

His punishment? He was required to roll a large rock up a mountainside, only to be told once he reached the top to do it again, and again, and again – for eternity!

That is how I see farming and farmers today, in these exceptional times.

Soil scientist and author Dr Doug Edmeades is the managing director of agKnowledge Ltd.

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THE 18 | Issue 6

COUNTRY

Beef genetics add value to dairy beef Dairy beef makes up the bulk of this country’s beef exports and by using the correct beef genetics, significant value can be added throughout the value chain.

T

he latest results from Beef + Lamb New Zealand Genetic’s Dairy Beef Progeny Test shows that up to 45kg of additional carcass weight can be achieved by mating dairy cows to the right beef bulls.

Dan Brier, General Manager of Beef + Lamb New Zealand Genetics, says the latest results from the progeny test just reinforce the value of selecting the right beef genetics to use across dairy cows.

He says there is a huge pool of bulls available that can be safely used over dairy cows and offer an improvement in gestation length and calf value, hopefully reducing the number of calves that become bobbies.

“The progeny test shows we can have our cake and eat it. We can select bulls for short gestation and low birth weight, important for dairy farmers, and we can still get fast growth and superior carcass traits, important for beef finishers and pro ocessors.”

carcasses, so the science team selected a range of EBVs to assess whether the numbers mirrored actual performance. This proved to be the case and EBVs were found to be good predicters of birth weight and gestation length. No calving problems were reported.

Scientists found that while the majority of sires followed the expected pattern of heavier calves at ere birth growing into heavier carcasses, therre we outliers that produced above averag ge carcasse es despite the calves being below w average weight at birth. The inverse was als so found.

“This means that while farmers can select sires to o produce calve es weighing 36-37kg, the final carcass can vary y by more than 30kg. The key is targeting EBV Vs for both birthweight and 600-day weight.”

After being weaned at 90kg, the calves were run into their lifetime mobs based on weight and sex. The mean age from birth to processing was two years and four months.

Dairy cow mating study

The worth of genetics

In the 2016 and 2017 se easons, 39 Hereford and 34 Angus bulls werre mated via AI to crossbred dairy cows on n Limestone Downs, Port Waikato.

The res sulting calves were run in large mobs until fin nishing at 23-31 months at an average of 500kg for heiifers and d 600kg for stteers.

Bulls in the trial were selected on EPVs (estimated breeding values) and the focus was on lighter than breed average birth weights, gestation length and 600-day weight.

Dan says they were conscious that while dairry farmers want short gestation, finishers wa ant heavy

Genetics proved their worth again at proce essing, with carcass weight, dressing-out percenttage and eye muscle area all being affected by the sire.

“This means that for carc casses of the same weight, there was a variation in the weight of the high value muscles according to sires.””

A meat quality analysis carried out at Massey Unive ersity found that the dairy beef meat was tender, had good colour and held its own against traditional beef.

“These results highlight the potential to increase the value of New Zealand’s dairy beef at every stage

along the supply chain. It really is as simple as selecting the right beef genetics to use across dairy cows.”

Exciting collaboration The Dairy Beef Progeny test is ongoing and B+LNZ recently announced a collaboration with LIC, this country’s largest supplier of genetics to the dairy industry.

Dan says he is excited about this collaboration with LIC and adds that dairy farmers are an important and valued part of B+LNZ. An alignment between LIC, B+LNZ Genetics and beef breeders will ensure the best beef bulls are available for the domestic and international dairy markets.

This season, 26 bulls will be used across 1600 crossbred cows at Pamu’s Wairakei Estate.

Calves will be reared by a commercial calf rearer and transferred to These results another farm for growing highlight the out.

Supplied by Beef + Lamb New Zealand.

potential to increase the value of New Zealand’s dairy beef at every stage along the supply chain.”

THE 1 | Issue 6

COUNTRY

Issue 6 | 1

SPONSORED CONTENT

Pamu and Esri ArcGIS innovation helps solve winter grazing challenges

W

ith a growing focus on compliance and its expectations for farmers, the agriculture sector is increasingly looking to the innovative use of technology to help meet its obligations and manage risk.

When Southland farmers came under the media spotlight for wintering practices in 2019, Pamu’s Geospatial Services Manager Bronwyn Rodgers recognised that part of the solution would lie with GIS. “While none of the winter grazing incidents highlighted were on Pamu land, we knew we had the tools to provide the insights that would improve practice. Our team of environmental, animal health, soil health and geospatial specialists got together to see how we could support our farm staff when selecting paddocks for cropping.

Forage crops are planted in spring for grazing the following winter, so the insights enabled by ArcGIS would have an impact the following season,” says Rodgers.

Using ArcGIS, Pamu’s in-house team of geospatial and soil specialists created two separate applications based on Esri’s ArcGIS Online platform and Survey123, comprising data collection, collation, reporting and analysis. Using mapping technology, farm staff can record the management options they would need to put in place to mitigate risks around drainage features, waterways, soil types, slope; and considerations of animal welfare to select the most appropriate areas within their farms for forage crops.

The real value in the apps is the ability to input data whilst in the field, in real time.

A second winter grazing app involves deeper analysis at the time of grazing the crop, providing photo verification of mitigation actions plus advisory comments on land management. It also places emphasis on animal health and welfare needs at the time of grazing the crop.

“These easy-to-use apps are interactive, with feedback on differing

options that can influence decisionmaking. The results sit on a cloud platform to create a record of where and what mitigating actions are employed, and this can be integrated with other farm information to enrich the farmer’s knowledge and understanding of their land,” says Rodgers.

In an ongoing effort by Pamu to stay astride of innovative solutions, all Pamu staff are issued with mobile devices loaded with these applications, which can integrate with other solutions to deliver a high-tech, modern and sustainable farming future.

More information Eagle Technology Agribusiness Lead:: Murray McCallum E: mrm@eagle.co.nz M: 021 763 044 www.eagle.co.nz/agtech

The

Mapping Platform for

AgTech

Making New Zealand’s Agriculture Smarter Spatially manage your farm Make farms safer Monitor with Drones & Sensors Better understand productivity Improve compliance management See how location intelligence is impacting Agribusiness in New Zealand - www.eagle.co.nz/agtech

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