The annual Fieldays – is more than just an excuse for John Campbell and the TVNZ Breakfast team to don Swanndris and talk to salt-of-the-earth woodchoppers.
It’s also a reminder that New Zealand still runs on the back of its agriculture exports.
Around $17.4 billion of our annual export income, relies on global consumers continuing to consume our animal-sourced products.
The sector has led New Zealand’s economic recovery during the pandemic and, thanks to high milk prices and increasing demand for our meat products farmers have money in their pockets. The smart ones, we hope, are buying innovative, data-driven farming equipment like solar-powered cow collars that can control herd movements rather than a new petrol-powered Ute.
But it’s also a sector in transition – international competition, new requirements to drop methane emissions, as well as freshwater regulations are forcing all farmers to adapt and to embrace new technologies.
If the rapid tech advances that have disrupted and driven innovation in other industries haven’t happened with quite the same speed in food and agriculture, that change is coming.
And that’s where our booming agritech industry comes in.
It’s one of our fastest growing export sectors and it’s got a lot more investor attention post-pandemic as food security becomes a concern.
We’re talking about facial recognition for livestock that provides info on an animal’s well-being, the manufacturing of alternative proteins, using genomics in the dairy industry – groundbreaking ideas from inventive Kiwi companies that offer innovation and valuable export potential.
Fieldays wrapped up last weekend but one event that got lost in the coverage was the release at the event of the Technology Investment Network’s second annual NZ Agritech Insights Report (to qualify for inclusion in the Tin200, companies must originate in New Zealand, operate in the high-tech manufacturing, ICT or biotech primary sectors, have developed their own tech-based IP and generate at least 10 percent of their revenues overseas.)
The report – sponsored by, among others, New Zealand Trade and Enterprise, the Ministry of Business, Innovation & Employment and the government’s innovation agency Callaghan Innovation – is based on data from TIN’s 2020 survey results – and comes 11 months after the government announced its Agritech Industry Transformation Plan. A plan that, then Minister of Economic Development, Phil Twyford committed $11.4 million to, promising – “a collaboration between government, industry, investors and the research communities working in unison to grow the Agritech sector.”
He stated that it “will evolve as we learn more about how best to work together to achieve our vision of a globally competitive Agritech ecosystem, producing ingenious value-adding companies that provide meaningful jobs, solving New Zealand and the world’s sustainability problems.”
The plan also promised ongoing support from a special taskforce and other existing Government programmes.
The launch was timely because from 2014-2018 the value of New Zealand agritech exports had remained pretty static – at around $1.2 billion, despite many agritech companies leading the world in innovation.
A large part of the initiative was to encourage our agritech businesses to go global, fast tracking commercialisation in the agritech space.
The plan explicitly told New Zealand agritech firms to raise their gaze as they had become “overly introverted, focusing primarily on the problems and needs of the New Zealand food and fibre sector, and largely ignoring the broader global issues that could be addressed”.
There hasn’t been time for those changes to filter through yet but still the TIN report released at Fieldays holds some good news.
Growth in the export sector is up 7.5% – to $54.9m. The total worth of the sector to the local economy came in at $1.4 billion, with two of the biggest companies in the sector – Gallagher and Livestock Improvement Corporation (LIC), contributing 40% of the total revenue for the 200 tech companies in the TIN.
The report also saw venture capital investment in New Zealand companies, across all tech sectors, increase to $15 million and angel investment increase to $160m from $108m – but didn’t break this down to agritech companies specifically.
On the other hand some findings weren’t as welcome; investment in sales and marketing activity is up by just 2.2% to $192 million – leading one commentator, ITP Techblog’s Paul Brislen to comment – “How can you command a global presence and stride your markets like a behemoth if you don’t tell anyone you’re out there?”
The number of agritech companies on the TIN200 increased by just two from 20 to 22, with the average age of the company down slightly, but still sitting at 25 years.
Early stage companies mirrored the sluggish growth numbers – also increasing by two – from 109 -111.
But expect things to look brighter next year.
The Finistree fund, launched in April, is the initiative of Silicon Valley-based Finistere Ventures in partnership with New Zealand Growth Capital Partner and will help overcome the problem of local startups in the sector raising sufficient capital to take their products global.
Ask any start-up – it isn’t getting the initial one million that’s hard, it’s the 10 million or so after that.
Arama Kukutai, co-founder and partner of Finistere Ventures promised the fund will – “anchor more investment from our global network of partners like Rabobank, RIV Capital Inc. and Yamaha to support New Zealand’s best startups alongside us – similar to what we’ve accomplished in Ireland, Israel and North America.”
Going global with our agritech is a win-win – our meat and dairy earn billions; there’s no reason that the agritech that helps fuel it – can’t too.
A robust agritech sector will supply more jobs, greater export earnings and enable more responsible, sustainable farming; the next challenge may be keeping those businesses, their jobs and the IP they create in New Zealand, as they become increasingly desirable to overseas buyers with deep pockets.