Facilitating growth in an uncertain world

MEDIA RELEASE – 9th June 2014

KPMG Agribusiness Agenda 2014

Facilitating growth in an uncertain world

Embargoed until 6.00am Monday 9th June 2014

Primary sector leaders are approaching the 2014 election with “some degree of trepidation”, reports KPMG New Zealand.

That was a key theme of the just-released Volume 1 of the 2014 KPMG Agribusiness Agenda, titled “Facilitating Growth in an Uncertain World”.

KPMG’s Global Head of Agribusiness, Ian Proudfoot, says discussions with more than 150 industry leaders revealed many were concerned about the unknowns surrounding the September election outcome.

“The possibility of any potential alternative coalition government, and its likely policy position towards the primary sector, was a top-of-mind issue for industry leaders during our discussions.”

“There is a high level of uncertainty around the future direction of policies that are critical to the success of the sector.”

For instance, leaders are focused on whether the next government will remain committed to free and open trade access. Securing high-quality trade agreements and market access for New Zealand’s products was ranked an increasingly important issue in the 2014 Agenda.

Other areas that could potentially be affected after the election included: the future direction of environmental policies; continued investment in water infrastructure; policies around foreign direct investment/immigration; and the level of public funding for R&D.

However some leaders interviewed for the Agenda recognised there were some potential policies of an alternative government that could have “real appeal” for the sector.

According to Proudfoot: “One positive expectation is that a new coalition government would take a much more active stance in promoting sustainable business – with a particular focus on increasing R&D investment into environmental issues such as greenhouse gases, nutrient leaching, and water quality.”

In other key findings from the 2014 Agenda, biosecurity was ranked as the top priority by industry leaders for the fourth consecutive year; and negotiating Government Industry Agreements (GIAs) was a key focus.

“Last year, the discussion centred on whether or not a sector should enter into a GIA with the Ministry,” says Ian Proudfoot.

“Now, most leaders consider that engaging with MPI makes good sense. The debate has moved on to what should be included in the GIA, and how costs should be shared between participants.”

Food safety was another key issue in this year’s Agenda, highlighted by the fall-out from the mid-2013 Fonterra botulism case. Ian Proudfoot says the impact of the recall has been felt across the industry.

“Many industry leaders are uncomfortable that the regulatory environment appears to be moving back towards a ‘command and control’ approach in response to the botulism scare, rather than continuing the more collaborative approach developed in recent years.”

“A better approach is for the sector to stand up and defend the proven world-class quality of New Zealand’s food safety system, in partnership with the Government, while working on areas identified for improvement.”

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