By Thought leader: Professor Hamish Gow

Strap yourselves in farmers. It’s about to get very interesting.

The world is changing at an increasing pace, and you will need to adapt your approach to business to prosper in the future.

Don’t be scared by this, but there are eight massive ‘flips’ coming at the New Zealand farming sector. If we embrace the opportunity to move with them, we’ll take business to a new level.

The first flip is New Zealand has lost its dominance as a trader of spot market products and now faces stiff competition from many other countries. It’s served our country well for decades, but it is not where we need to be any longer. Our exporters are leading this repositioning of New Zealand as a source of high integrity, value-added food products.

Secondly, we’re moving from a world where our products were governed by regulations set by government authorities to one where the conscious consumer certifies our products. We have to respond to what these conscious consumers are calling for and align our production systems to deliver what they want.

Thirdly, New Zealand farming businesses need to move from focusing on sustainability, to a circular economic model focused on net zero waste and pollution, re-using products and materials, and the regeneration of nature.

Fourthly, we need to move from a world where we just tick boxes on annual audits of our production systems to one where there is constant and radical transparency, confirmed by digital product passports. This is a big mindset change for farmers but if we want to achieve the highest value for our great products, then conscious consumers want to see everything for themselves.

Fifthly, we have to find ways to share the economic wealth created by a business across all the people who work in it. A great early example of this is New Zealand’s sharemilking system, but we need to find ways where we can share wealth with others, particularly the capital gain on the land resource.

A good example of this is many of the start-ups in the United States can’t afford to pay much more than minimum wages initially, but they share future wealth with staff through shareholdings. We need new ways for farmers and businesses to create shared value rather than creating value just for themselves.

The sixth flip coming our way is the need to create high-performance teams to operate our farming businesses, especially as we move more towards a ‘high-tech’ world.

Rather than a farm owner knowing a little bit of everything, there is more reliance on specialist knowledge from within the team. So, a farm owner becomes more like the conductor of the orchestra rather than the person who can play every instrument to varying levels of competence.

Closely aligned to this is the seventh flip, which is a move from owners having a passive knowledge of every aspect of their farm business to a world where there is much more reliance on data collected automatically through sensors and artificial intelligence.

A good example of this is the United States grain growing sector which is already relying heavily on artificial intelligence and sensing devices to determine crop performance. It’s coming to New Zealand and fast.

Finally, our eighth flip is the role of support services which will switch from a sales-based approach to being partners with other providers to help farmers and their staff achieve the performance they want.

Think of a farm owner as a Formula 1 driver, surrounded by a team who monitor the performance of the car and help them navigate around the track at a safe and sustainable but fast speed.

As a small island nation, New Zealand has to form a strategy to capitalise on these new opportunities.

Know that everything you do on your farm today will be observable by anybody in the world whether you like it or not. So, let’s get over it!

We have to be absolutely open. We have to go for radical transparency because that is our only defence, when everybody can come and have a look at us.

In such a world of radical transparency, the industry has to consider if it is comfortable with how it looks when it comes to welfare issues, such as the treatment of bobby calves.

You have to ask yourself, would you treat your pet the same way?

This is how consumers sitting in Europe are looking at it. They don’t know anything about our agricultural systems and how we do things but are looking at that and thinking, is that the right way to treat them?

Compare it to how the Merino industry reacted to mulesing 20 years ago. When the controversy around mulesing erupted, it was on the front pages of the major fashion magazines in North America and Europe.

If a similar kind of battle erupts, it will occur outside New Zealand and the industry needs to be aware of that.

They’ll put it straight into our markets and we’ll be closed down within seconds.

New Zealand is facing a massive reset, similar to what it faced following the removal of subsidies in the 1980s.

Our country has to be in it for the long game and be a trusted partner, rather than just focusing on a trade mentality and taking the highest price available.

When the dust settles, we could be in a trading bloc with countries that care deeply about sustainability, where consumers are content to reward our efforts to create the best food in the world.

Professor Hamish Gow is a Professor of Agribusiness and the Sir Graeme Harrison Professorial Chair in Global Value Chains and Trade at Lincoln University. Views expressed in this opinion article are derived from an ongoing project he is collaborating on with PWC consultant Emma Boase.