The sustainable edge of New Zealand farmers

Businesses that have a focus on emissions stand to improve their productivity and profitability writes ANZ New Zealand Business & Agri Managing Director Lorraine Mapu.

Growing up on a dairy farm, dad would readily remind me that New Zealand farmers are some of the most innovative and clever in the world.

They’ve had to be, being halfway around the world from many of their markets and knowing what consumers want from the production of our food and fibre.

Our farmers understand how to weather storms literally and figuratively – from cyclones to cycles in the economy.

Life is particularly challenging for farmers now, with their balance sheets hit at both ends. High inflation, interest rates and input costs have come at a time when many are also facing into lower prices for their products.

On top of that there’s a structural shift going on with global food production.

Awareness around the impact of climate change means international consumers are more conscious of the greenhouse gas emissions created around their food.

And governments and regulators around the world are responding, so many of the big companies that we sell to, like Nestlé, McDonalds, Danone, Tesco and Sainsbury’s, are demanding more from our farmers.

This approach is now being reflected in the international trade agreements New Zealand has with some of our key markets.

{CF_IMAGE}

Access to markets is likely to become increasingly contingent on emissions practices, due to changing consumer preferences, mounting awareness of climate change, and the ambitious targets being set by countries.

Kiwi farmers have a head start on many other food producers around the world because many have been environmentally conscious for many years. Our farms already have some of the lowest emissions in the world.

The emissions challenge the world is facing is, therefore, an opportunity for New Zealand to cement our place as one of the world’s foremost low-emission food producers. If we do this well the sector will be well placed to help the country achieve its goal of doubling exports by value in the next ten years.

But to meet this challenge we need a collective approach to tackling it – industry, farmers, banks, government, and wider society.

Given the critical role agriculture plays in the financial well-being of our nation, we need to make this transition in a way that balances sustainability with profitability.

This has been recognised by the wider industry, as shown by the collective responses so far to this issue.

Our biggest processors and food companies are setting targets and driving emissions reduction throughout the supply chain, and the amount of support and guidance available to producers is steadily increasing.

We’re getting in behind industry-led initiatives as well.

As New Zealand’s oldest and biggest bank our success is inextricably linked to the success of our customers. We understood that when we funded Taranaki’s first co-op, the Cardiff Co-operative Dairy Company, in 1891. We’ve funded many other producers, exporters, industry-led initiatives, recovery plans and trade missions since.

This structural change will now require banks to help fund the environmental transitions many of our farmers have already started.

At ANZ New Zealand we understand that a critical part of our role is to work alongside our customers on the pathway to a sustainable and profitable low-emissions economy.

We’re keenly aware that the steps needing to be taken by farmers to change their operations are complex, in many cases expensive, and will take time.

Forward-thinking farmers are using the tools already available like breeding, feeding and management to move towards this goal, and improving on-farm efficiency, productivity and profitability in the process.

We shouldn’t lose sight of the gains already made over the past few years – technology, innovation and careful changes to management practices have provided many farmers the means to begin measuring and reducing their footprint.

The intergenerational nature of farming in New Zealand means many are building on the farming methods of those who have come before them. The basic principles of farming still stand strong, but the farmers of today are simply faced with a modern challenge to overcome and adapt to.

We want farmers to know that we understand the size of this undertaking and reassure them that we see it as a challenge that needs to be faced together.

ANZ New Zealand has an enormous wealth of knowledge in our staff up and down the country. Our agriculture bankers, many of whom have first-hand farming experience, are dedicated to helping farmers and their local communities succeed.

Our insights team and sustainability specialists work closely with our bankers and industry to provide valuable intelligence to support customers as they navigate the economic, regulatory and environmental changes being experienced.

Financial benchmarking, data and insights are already helping customers see where they can improve their businesses. Our industry-leading Environment Social Governance Information System (ESGIS) insights tool, which aggregates local physical and geographic data with our own financial data, is a critical tool for better decisions in our agriculture portfolio.

ANZ New Zealand continues to develop finance options, like our Business Green Loan, to support the shift to more sustainable business practices.

With the Government, we’ve also invested in AgriZeroNZ, which is accelerating work on finding technological solutions to on-farm methane emissions, like a much-needed vaccine for animals.

Scientific research like this will play an important part in the agri sector’s response to the need for lower emissions in the future.

We’re all going to have to invest financially in technologies and processes, and in different ways of thinking.

ANZ New Zealand banks more individual farmers than anyone else, so we’re in it for the long haul. Our history shows we’ve been alongside farmers as they navigate more challenging times – and the emissions movement will be no different.

But the clock is ticking, and farmers and the New Zealand economy cannot afford to stand by while our global competitors make gains in this space. Like our predecessors, we should lead the world in evolving how we produce our food and get it to market.

We know it will take time, energy, money and dedication - and when our customers are ready to meet the latest challenge in New Zealand’s farming history, we’re just over the fence and ready for a chat.

This article was first published in the New Zealand Herald.