$1.2 billion agritech sector on the rise
Today’s Business Day quotes research by Coriolis:
New Zealand’s agritech sector exports are worth $1.2 billion and could increase 10-fold, according to a new report for New Zealand Trade and Enterprise. However, the sector remains much smaller than in many of our competitor countries.
The report by Coriolis Research found the sector grew at a rate of 4 per cent a year in the five years to 2013, while the “predominantly agritech” part of the sector grew at an even faster rate of 9 per cent a year. Animal health products were the biggest category at $311 million, followed by fencing supplies and equipment and machinery and systems, each with $307m worth of export sales. The fastest-growing categories were animal genetics, growing annually at 32 per cent thanks to live cow exports to China, and plant genetics, which were growing at 10 per cent a year. New Zealand’s agritech exports are heavily weighted to Australia, the United States and Europe.
But while the agritech sector was growing rapidly, the report found it was underperforming in size compared to key competitors such as Israel, Ireland and the US. “For example, Israel, a tiny desert state the size of the West Coast, exports approximately 10 times as much agritech as New Zealand,” it said.
Coriolis said the industry in New Zealand could grow to between five and 10 times its current size, with Europe, China and South America standing out as having future growth potential. “The removal of the dairy quota system opens up new opportunities across Europe. The constant need to increase farm efficiencies in South America drives export growth from New Zealand. “The China-New Zealand Free Trade Agreement, plus China’s sizeable demand for meat and dairy products provides New Zealand agritech firms with a significant opportunity to be the ‘go-to’ agritech solutions provider,” Coriolis said.
Economic Development Minister Steven Joyce said the agriculture sector played a significant role in the economy. “This research shows that our innovative agritechnology systems generate very significant exports in their own right, and provide the opportunity to deliver much more for New Zealand in the years ahead,” Joyce said. New Zealand has historically underperformed in agritech exports compared with other advanced agricultural nations, he said. “However, our exports are now growing more quickly than our competitors’, and opportunities for more growth exist across a wide range of markets. Europe, China and South America stand out as the biggest areas of potential growth,” Joyce said.