Wide range of research by agricultural scientists

Press, 3 September 1982, Page 18

Wide range of research by agricultural scientists

"Combating the risks of primarv production" was the theme of the annual convention of the New Zealand Institute of Agricultural Science held in Dunedin recently. More than 120 papers were presented from scientists, researchers, advisory officers, marketing experts and farmers. Organisations taking part included the Agronomy Society of New Zealand. N.Z. Society of Farm Management, N.Z. Society of Horticultural Science, N.Z. Veterinary Association (Otago branch). N.Z. Society of Plant Physiologists, and the N.Z. Association of Soil Conservators. Extracts from some of the papers are:— Financing Financial support policies had been a feature of the farming industry in recent years, Mr R. G. Duffy, senior agronomist with the Rew ensdown Fertiliser Cooperative, Ltd, told the conference. An example was the relatively easily acquired loan money from the Rural Bank at rates of interest lower than the annual rate of inflation. Coupled with the Govern-ment-accepted responsibility to retain farmer incentive and thereby, farm production, the responsibility for farm debt, and debt servicing in practice, had tended to move outside the farm gate. "In other words, in spite of more than adequate levels of equity, farmers are borrowing to the limits of what they can service annually,” said Mr Duffy. Rises in land values and the effect of high inflation were stimulating significant desperation among aspiring owners of economic units. Mr Duffy cited the case of a 27-year-old farmer who arranged bridging finance of $lBO,OOO at 19 per cent interest, repayable in three years, to put himself on to his property. This was in addition to more formal financing. Describing equity-based lending levels as hazardous, Mr Duffy said some lending institutions had revised their acceptable equity levels upwards during the last two months, but he questioned whether these revisions were often enough or went far enough. “They need to ensure that the desperate farm owner is not put into a worse position by the loan than he would be without it.' "The market uncertainties of the present time are sounding a clear warning that capital gain in farming may be much less secure than in the recent past. One hopes the warning will be heard.” Risks associated with intensification of farming en.terprises could affect large \sections of New Zealand’s Tanning production, said Mr Duffy. Intensification generally followed the awareness of a threat to existing levels of disposable income. The kind of threat and its importance would influence the scale of the intensification measures adopted. Theoretically, at least, risks increased with intensification and the basic rule was to accept a level of risk unlikely to jeopardise the venture.

Mr Duffy identified two major areas of concern — the physical risks of on-farm production and associated risks arising outside the farm gate. An example of intensifica-

tion was rotational grazing, a method of increasing stocking rates on farms which has now developed into a tool for pasture improvement. - However, there were associated risks — contagious abortion, pink eye, and other contagious diseases that were likely to move rapidly through a hock of sheep kept in close proximity. Daily shifting created an expectation of movement in the routine and there was a risk of smothering. But since the first problems and the painful cost, avoidance techniques were now in use which greatly reduced the risks. As on-farm intensification developed, the farmer became more dependent on offfarm services, such as processors, transport operators and marketers, said Mr Duffy. Horticulture The rapid growth of horticultural exports from about s4om to sl4om over a period of five years and the wide range of markets reflected and excited vigour and confidence, according to the former Minister of Overseas Trade, Mr B. E. Taiboys. One of the most interesting aspects of horticultural development was the emergence of Japan as a market of major importance, in spite of quarantine restrictions which denied access for New Zealand’s fresh pip and stone fruit. The per capital income in Japan had increased from $2O in 1945 to $12,000 in 1981 and there had been no growth in the orchard area from 1970 to 1978. "That is obviously insufficent evidence to support exciting conclusions, but that, plus the fact that Japan’s imports of fruit and vegetables have been increasing' at about 17 per cent in value for a number of years, suggests opportunity.” This was the conclusion of the trade delegation which accompanied the Minister of Agriculture on a visit to Japan a couple of years ago, said Mr Taiboys. But that promise would only be realised if there was the closest collaboration between all those involved in the trade, such as bankers, research workers, producers, exporters and transporters. "And that undoubtedly is true for all products and all. markets in the horticulture industry.” New' Zealand must continue to diversify, putting more economic effort into those areas which would increase the capacity to earn overseas funds. Diversification did not necessarily mean growing a new crop; the goal could possibly be achieved by doing better what was already done well. "For a time we were launching a programme of introducing new breeds of sheep into the national flock to upgrade fertility. That programme unhappily came to grief on the rock of suspicion that the sheep might have been carriers of scrapie. “I do not know whether that has to betKe end of such endeavour — that is a question for veterinary experts. Certainly there is no other single change which would have a comparable impact on the sheep industry’s productivity.” The message received constantly from the marketplace was that pig meat and poultry offered increasing competition to red meat Producers of white meat used rigorous performance analysis to guide their breeding programmes but red meat producers had been slow to adopt Sheeplan and

Beefplan where selection was based on performance. On processing. Mr Taiboys said it was necessary to distinguish between the value added by processing and the cost of adding the value. If the product was processed in New Zealand, there would be more jobs, but unless the market would provide an additional margin for the final product that would more than cover the cost of the extra processing, it would have been done at the producer’s expense. It was then an additional cost. Diversification was not just the capacity to produce. To be successful, and that must surely mean putting some extra cash into the producer's pocket, each link through to the consumer must be firmly in place. Assistance No matter what commodity was being produced in New Zealand for export, the Government was involved with some form of assistance, the M.A.F.’s chief advisory officer, plant exports, Mr Richard Ivess, told the conference. Outlining the Government's role in horticultural marketing, Mr Ivess said the general theme was to assist in producing a product that would have a greater chance of competing on the international market. Mr Ivess stressed the need for proper marketing in the light of the big number of products and services that were competing for the consumer dollar. It was vital if New Zealand was to survive, let alone compete on the international markets, that the products offered for sale were tailored to satisfy a particular and identified customer need. Failure to do this, particularly on a buyer’s market, could result in severe financial loss. One of the basic objectives of the M.A.F. was to formulate and implement the quality assurance scheme, a method whereby the production industries (such as sheep, dairy and horticulture) could assure their customers of the quality of the product supplied. While quality assurance was an industry responsibility growers were not expected to be au fait with the finer points such as how the Dutch compared the New Zealand product with that supplied by Israel. This was where the Government had an important role to play, said Mr Ivess. As well as supplying input into areas of market research and industry planning the Government could help with cultural and product research advice. Research carried out by the M.A.F. agricultural research division and the D.S.I.R. was becoming increasingly market orientated arid export or potential export products were usually given preference. With the increasing horticultural production outstripping the ability of the M.A.F. field officer group to cope with the necessary certification, responsibility was being handed over to industry groups to act as their own quality controllers on behalf of the M.A.F., said Mr Ivess. _ The M.A.F. could then use ' its resources in a monitoring role during grading and an advisory role up to that point. Raspberries Raspberries were a crop suited to the South Island and had a number of advantages according to Mr G. I. Langford, a horticultural ad- ■ visory officer with the M.A.F. in Christchurch.

The fruit was in strong demand in many countries, particularly in asociation with dairy products.. New Zealand was one of the few southern hemisphere countries producing raspberries and had climatic and other advantages over many other potential producers. "There is a strong growerbased co-ordination body with both legislative teeth and the potential to handle large quantities of the crop," said Mr Langford. "There are exporters with experience and ability and market research organisations are steadily finding their feet." In terms of production, the South Island had a suitable climate, large areas of good land at reasonable prices, potential growers with the necessary skills, adequate labour availability in most areas and a postiive attitude by both the Government and regional bodies towards horticultural development. "While this would suggest large plantings, I advocate no such thing. I would suggest that there may be opportunities to be developed in the face of strong competition from other countries and other crops. "What is required is a logical planned approach to the production and marketing of the crop that maximises our advantages and works at ways around the disadvantages,” said Mr Langford. Current world trends in the consumption of food favoured fresh fruit and dairy products with fruit flavours. There was also strong interest in new and different juice products and natural health foods. These added up to a number of opportunities for berryfruit production, particularly raspberries, black and red currants and blueberries in the South Island. “Although the requirements for these crops differ greatly, they do have one thing in common and that is the necessity for a planned approach to their production," he said. Deer The export market outlook for deer products was exciting, Mr Mike Harbord, a farm advisor with the M.A.F. at Invercargill told the conference. Deer were at least as efficient as sheep or cattle at converting pasture to saleable produce and a lot of research was being done in the feeding and management requirments of deer. On an annual basis, adult stags and hinds were equivalent to about two stock units, but in contrast to sheep the periods of relatively high energy demand for deer were in the winter for stags and summer for lactating hinds. Useful supplements in winter for deer have been oats, barley, nuts, swedes, potatoes, pasture silage and hays. Peak feeding demands for hinds occur in the summer months when pasture could be dry or mature with a high proportion of dead or poorly digestive feed. Retaining sufficient pasture of good quality for lactating hinds was critical. Because of the high value of deer, proper feeding was a •priority. Optimum slaughter time for adult stags appeared to be soon after velveting, as long as the summer fattening phase had not been prolonged, Holding stags for slaughter post-rut, although producing lean carcases, had sometimes resulted in severe bruising which downgraded the carcase. Growing weaner stags at relatively high stocking rates on intensive pasture grazing systems for slaughter at 14 to 15 months had considerable potential, said Mr Harbord, Marketing The success of the horticultural industry depended on a co-ordinated planning approach to marketing, according to Professor R; W. Cartwright, of Massey University. Because there were three relevant groups involved in the industry - growers, exporters and the Governemnt — the responsibility for planning and control of each marketing plan should rest with a group comprising all significant exporters and representatives of the pro-

ducers working with a professional manager. Although the specific objectives of each marketing plan would depend on the marketing situation, every marketing plan should include the following points: regular reviews of the market situation. market research to guide such things as product and package development, quality assurance programmes, specified channels of distribution, specified price bands for each class of product which should be reviewed continually, promotion programmes for products. and provision for joint negotiation of freighting conditions and rates. Marketing organisations should be guided by the requirement to plan and manage market development and should be politically acceptable to producers, exporters and the Government. The new marketing structure must build on the strengths of existing organisations rather than be based on radical change. The four organisational alternatives for marketing were fully independent industries. voluntary planning organisations, licensed planning organisations, or a single-desk seller. In fully independent industries, where free enterprise growers, grower organisations and exporters pursued their own self interests without influence or constraint, the benefits of co-ordination would not be achieved. Voluntary planning organisations where exporters and growers co-ordinated their activities, had enjoyed partial success, but experience had shown that, in spite of the expressions of goodwill, self-interest frequently dominated the will to cooperate and co-ordinate. Licensed planning organisations such as the kiwifruit structure, had a stable base for -planning and joint management. But there were warnings concerning licensing policy and grower/exporter relationships and a reluctance to face up to the need for planning of longterm market development. Single-desk sellers, such as the Apple and Pear Marketing Board, were effective in all forms of marketing management and, in the absence of established private enterprise exporters, were the preferred alternative. However, in situations where private exporters were already trading, the imposition of a single-desk operation would drive out of business the only organisations with recent experience in the market. . Professor Cartwright said regulated planning organisations were favoured.