If Hawke’s Bay ever hopes to rise from the economic mire, it must take the decades old call to diversification more seriously by adding value to goods and services and increasing investment in science and technology.
Science is not something the region is known for, few businesses engage in the deep esoteric areas of physics, electronics and software, and non-primary sector research and development laboratories are a rarity.
Even though the traditional primary sector comprises 40 percent of the region’s gross domestic product (GDP), a lot of the serious R&D that can bring in new revenue streams is still contracted out.
Regardless, breakthroughs in animal genetics, forages, forestry, horticulture, grape growing, animal health, genetics and environment sciences; including elements of computing, engineering and electronics, play a big part in modern primary sector practices.
Examples include the development of drought resistant pastures, disease resistant crops, new varieties of plants, improvements in livestock fertility and weight gain, and the Carla saliva test which supports selective breeding to combat parasitic worms.
Ongoing scientific challenges include the elimination of pests, viruses and bacteria that can undermine our core industries, whether it’s varroa burdening our bees, Psa on our kiwifruit or parasites on our potatoes and tomatoes.
While the sector looks to improve efficiency, productivity and sustainability, our export partners are raising the bar; insisting our products, practices and processes comply with international standards, and supply chain technology enables tracking from the plate to the farm gate.
Like never before the primary sector is being forced to break out of commodity mould and look at smarter ways to produce and deliver products that world markets will happily pay premium money for.
Going for gold
“In most sectors there is a major disparity in production performances between those at the leading edge of technological adoption and those who are reluctant to change.”
The outstanding recent breakthrough, according to John Loughlin, who’s deeply entrenched in local heartland industries, is the development of Zespri Gold kiwifruit which has grown from a small base 10 years ago to earn more export revenue than the entire apple industry.
Loughlin who’s a director of AgResearch and the Port of Napier and an owner of Askerne Estate Winery, says high land, labour and comparative freight to market costs, mean we’re not a cheap place to produce food.
To compensate we are dependent on highly productive systems and investment in R&D to deliver “differentiated products” at premium prices.
Science wasn’t done any favours this budget; the funding pool was drained by $13.9 million to $773.7 million following the restructure of the Foundation and Ministry of Research, Science and Technology into the Ministry for Science and Innovation.
However an end to industry-specific contestable funding may be a good thing; with a third now in a general pool for core industry areas.
While the Government wants Crown Research Institutes (CRIs) to become more focused on practical science for the sectors they serve, Loughlin says a shortage of R&D investment by both the State and the private sector remains the biggest impediment to progress.
“It is interesting that the kiwifruit and dairy sectors invest heavily and cohesively in R&D and have displayed strong compound annual export revenue growth of over 9.8% over the last decade,” says Loughlin who’s also chairman of Zespri International.
Of course the kiwifruit trajectory has been somewhat curbed by the Psa bacterial threat, but he suggests other sectors could leverage its formula for success.
Loughlin reckons the best way to lift R&D spend and effectiveness is tight partnerships between industry and researchers. He says Zespri’s relationship with Plant and Food Research improved competitiveness and stimulated further investment.
Plant and Food Research is one of our largest employers of scientists, after Hawke’s Bay Regional Council, with purpose built labs in Havelock North and 60ha of research orchards. Its research and testing is mainly around bio-protection, insects and pests, plant pathology, environmental sciences and crop and fruit production systems.
Unison could be said to be deploying scientific skills and instrumentation for its region-wide roll out of ultra fast broadband which has the potential to change the game for a wide range of industries, including those in rural areas who’ve had decades of dodgy dial up or expensive satellite links.
Faster communication is essential for smart farming and literally keeping up to speed with what’s happening around the world. It improves access to real-time tools such as mapping based applications to help manage resources, compare yields, model terrain and temperature, grass growth and water supplies.
Tools being developed and enhanced by Hawke’s Bay Regional Council (HBRC) scientists and Massey University now help farmers get a better idea of water use; where certain crops will perform best, the right crop rotations and irrigation planning.
Ian Ritchie, Dean of applied science and computing at Eastern Institute of Technology (EIT) says there’s a lot of science in getting the most out of animals, and technology can help match food supply and demand, identify the number of growing days and when to plant so “all your peas don’t mature at once”.
It can also prevent double up when putting chemicals and fertiliser on the land. “Customers clearly want product with no bugs but they don’t want it covered with insecticide either,” says Ritchie.
Collaboration a key
Environmental science has a big part to play in long term planning and sustainable use of resources, and is increasingly driven by national policies around soil and water quality and availability.
HBRC employs 24 scientists with a strong focus on environmental sciences. The big project of the moment is the regional water storage dams in Central Hawke’s Bay designed to buffer us against low water situations.
There’s also a joint ‘whole of catchment’ project with Massey University and AgResearch, based on water tables and minimum river flows to inform consenting processes and assist with farm management practices and economic and environmental performance.
HBRC is also in ongoing discussions with Plant & Food on initiatives to increase primary sector productivity.
HBRC’s Chief scientist Graham Sevicke-Jones says science within councils is no longer an isolated and autonomous affair; there’s better networking and information sharing within and between regional councils and with CRIs.
With greater collaboration everyone’s a lot more informed resulting in more practical application of science in the region. “This stuff costs too much to be doing it individually or replicating what’s already been done,” says Sevicke-Jones.
There’s no question science is a major driver of innovation and development, but entrenched attitudes and practices often stand in the way of diversification and adopting new farming practices.
“We’re trying to understand the psyche of the farming community in order to have better engagement around their current interests and the triggers they have in regard to changing land use,” says HBRC economic development manager Michael Bassett-Foss.
While younger farmers might be more open to land use change, older players who’ve done things a certain way for generations are often not so easily convinced. “We need to know what will trigger them to move into higher rates of cropping which might achieve higher rates of return,” says Bassett-Foss.
For example, pastoral land value may have been reduced over time and new soil treatments or a move to cropping or even vineyards may deliver better economic yield. Steep or damaged land may be better off in forestry rather than sheep and cattle.
“We’re leading the charge in lots of areas, particularly around water …however I think we can improve how science is done strategically in the region,” says Bassett-Foss.
AgResearch director John Loughlin says Hawke’s Bay must find ways to tighten the integration of research and development and increase investment in these areas if it’s to deliver on key sector goals and strategies.
“In most sectors there is a major disparity in production performances between those at the leading edge of technological adoption and those who are reluctant to change.”
The gene genies
An important part of delivering consistent quality from our pastures to the ports is ensuring the animals we raise are healthy, resilient and of the best quality.
Rissington Breedline, local pioneers of ‘genetically superior’ sheep and cattle breeds, recently commissioned independent research confirming that genetic technologies boost production levels.
A nationwide survey of 225 farmers saw 72% acknowledge high quality genetics were vital for a successful farming operation; around 90% strongly agreed new technologies were essential for optimising genetic and financial gain.
Rissington Breedline merged with LandCorp Farming’s genetics division in July to create Syrex Genetics, which is now boosting its investment in increasingly expensive research and development technologies.
The merged entity now has the largest single commercial DNA breeding database in the world, enabling customers worldwide to access genetics from its trademarked sheep, cattle and deer breeding lines. Its technology means clients can quantify quality outputs at all points along the supply chain.
“Syrex Genetics will consolidate and focus the red meat genetics industry in New Zealand for the benefit of the whole industry including farmers, processors, retailers and consumers,” says CEO Graham Leech.
Raising the skill base
Without a university or a tertiary institute focussed on the primary sector, the region is at a disadvantage, although EIT is increasingly tailoring its curriculum to deliver to local needs.
The closest we get to raising young scientists is applied science degrees for those wanting to become technicians in the food industry or become grape growers and wine producers. “We mustn’t forget that most of the food that comes off our farms has to go through some sort of processing,” says Dean of applied science and computing, Ian Ritchie.
Despite a glut of certain grape varieties, recessionary times and even bankruptcy for some boutique vineyards and outlets, Hawke’s Bay continues to be a vintner’s paradise, consistently winning awards for world class vintages.
EIT is one of only two New Zealand institutions with internationally recognised courses for a degree in viticulture and wine science. It has its own well-equipped wine lab and vineyard, produces about 60 graduates a year, and has recently added an online course.
Despite being surrounded by an expansive coast, EIT won’t compete with Nelson Marlborough and Bay of Plenty polytechs by training people for marine science and aquaculture. Local iwi however are currently researching possible aquaculture options which could involve science and have regional spin-offs.
EIT has 100 full time students taking its computing systems degrees including computer science and business computing. These can play as an essential part in computerised farm management practices, in particular supply chain management.
“IT has the potential to make a tremendous difference, particularly if you have a big farm and are involved in track and trace which is also helping drive broadband uptake,” says Ritchie.
About 25 percent of graduates end up working in the primary sector and others in support areas such as accounting, where 50 percent of the clients may be farmers.
Looking to the future, EIT is considering higher-level applied management and business studies specialising in horticulture and agricultural, although a lot depends on the daunting task of attracting candidates.
Saucy science incentives
Much of what distinguishes Hawke’s Bay from neighbouring regions is its processing capabilities, whether it’s grapes into wine or tomatoes and beef into tomato soup with meatballs. Both require R&D and food and nutritional science.
Heinz Wattie, has been upgrading plant and practices for years to become a highly cost competitive, globally successful processing operation. It’s currently relocating production plant from Australia to Hastings to make sauces, beetroot and some canned products.
McCains, another global food giant, has also been centralising here, adding credibility to recent descriptions of the region as ‘the Australasian food capital’.
Food Hawke’s Bay, the only organisation of its kind in New Zealand, has seized the opportunity to expand on this theme. Its mandate is to connect 130 or so food related businesses with innovation and development resources, including consulting experts around the region who have food science and related skills.
General manager Jane Libby says the food industry faces considerable compliance hurdles to get products to local and export markets. “Adding value often means there are technical or scientific requirements to create products that are worth more.”
The group, primed with seed funding from the Regional Strategic Partnership is now armed with a series of case studies to support further investment and is hopeful of partnering with the new food R&D unit at Massey University.
The unit at Massey is part of the Food Innovation Network New Zealand (FINNZ), one of four food labs, including Manukau, Lincoln and Waikato, recently established by the government. Chamber of Commerce chief executive Murray Douglas remains aghast that Hawke’s Bay, the so-called fruit bowl, was ignored in that process.
In his own family fig growing business Douglas wants to move beyond jam into producing fig extracts which are “full of flavoring and antioxidants”. This process, which could be a New Zealand first, will require significant food science input and post harvest treatments.
The thing that grates Douglas is that he’ll most likely have to be contract the work to Massey University. “We need to start doing these sorts of things ourselves but we’re not even on the radar, because we’re not standing up and making enough noise.”
He wants to see a Hawke’s Bay centre for innovation where business meets industry, academic institutes and local experts, not only for the food sector, but technology and other businesses looking to develop new products.
Hastings-based Biovapor New Zealand has to engage in some serious scientific research to advance its breakthrough fumigation technology which is at the frontline of biosecurity in several ports around New Zealand and the islands.
The heat-based, environmentally friendly alternative to traditional toxic approaches, treats containers of imported and exported goods including machinery, sawn timber and pallets, fruit bins and the majority of imported vehicles.
“The technology we have developed is unique in the world; it’s completely mobile and self contained, we can take it to the port and treat the containers in a really efficient way,” says company founder Lance Dear.
Pressurised turbines deliver bursts of time controlled humidity and heat to an international standard core temperature. Dear sees huge global potential in treating logs for export, describing this as the Holy Grail.
Forestry is a major local industry which uses a considerable amount of science in growing, managing and processing the logs to add value; PanPac in particular grows and processes trees, timber and pulp for local and export markets.
Although tests of Dear’s Biovapor fumigation process have proven 100 percent effective in eliminating surface insects and larvae from logs, there are no heat standards for log treatment.
There are also political obstacles, as many timber buying nations including India and China insist on using the toxic and ozone depleting agent methyl bromide.
“When we created a fast, large-scale fumigation system we never imagined we would have to write our own standards and get involved in all the cost and science to get into logs,” says Dear.
He remains determined to gather scientific data to prove the case, although it could be five years before a new standard is approved. In the meantime Biovapor is working with a process engineering partner to model a solution that will recapture and recycle toxic methyl bromide residue.
Exporting the waste stream
Recycling less appetising animal parts has proven a highly lucrative niche for Waipukurau-based Agri-lab, which supplies raw material to international pharmaceutical, nutraceutical, dietary supplement and cosmetics industries.
Animal organs, glands and other by-products rich in enzymes, hormones and bioactive tissue are carefully extracted from selected farms at optimal times of the year, then frozen, freeze dried or powdered and packed for export.
Director Angela Payne describes her business as “adding value to the waste stream”. Agri-lab won the HB Business Awards Innovation Award in 2010, and earlier Agri-business and export awards.
The company has built up its own skill base and because it has broken new ground ended up helping develop industry specifications. “All our product have to be 100 percent compliant to meet export requirements and in many cases our products are brand new to MAF so we’ve had to work closely with them.”
Another firm dealing with biomaterials for medical, pharmaceutical and medical export market is Southern Lights Ventures based in Napier, with offices in New Jersey. It engages local and US scientists and sources ‘product’ including bovine tissue and formulations to international medical standards based on customer requirements.
‘Waste stream’ products are still a niche area for New Zealand and there’s clear potential for significant growth, although Payne says this is limited by our low profile. “Many don’t even know where New Zealand is, let alone Hawke’s Bay.”
Whole of industry approach
EIT’s Ian Ritchie agrees international customers have difficulty enough identifying New Zealand products without trying to relate to Hawke’s Bay as an exporter.
He supports a whole of industry approach with the country as one big factory, delivering our best product to market in a continuous flow, based on international specifications.
Currently we’re known for producing quality only when conditions suit. “When you’re trying to run a restaurant in Paris it doesn’t cut the mustard when you say something is not on the menu this week because there was a drought in New Zealand.”
HBRC economic development manager Bassett-Foss says an optimal supply chain situation means everyone needs to know exactly what’s coming so they can maximise the flow and produce an optimum end product.
Although scientific advances have a significant impact on productivity and the wealth of Hawke’s Bay’s primary sector; it doesn’t go far enough. And new technology is often treated as an imposition rather than being embraced as essential for a more modern and innovative economy.
According to Chamber of Commerce CEO Murray Douglas, everything points to the need for a more balanced and modern economy.
He wasn’t surprised BayBuzz found little evidence of science in Hawke’s Bay outside of agriculture, horticulture and viticulture. He’s hopeful the new private sector-based Business Hawke’s Bay group may take a leading role in promoting diversity.
“That’s not to say nutraceuticals, biotechnology or plant physiology are not important, but we’ve got to build a broader base that’s not prone to the winds of change of commodity prices.”
Business HB is in discussion with Massey University and other entities to encourage other kinds of research. While ultrafast broadband will be a major step forward, Douglas says we need to learn how to use it to enhance productivity and reduce our carbon footprint.
Currently New Zealand’s State and private sector investment in research and development is only one percent of GDP, half most other OECD nations. Unless Hawke’s Bay region can improve on the national average, innovation will suffer.
If we hope to attract new types of businesses we need a determined strategy so entrepreneurial and high net worth people with great ideas bring their energy, focus and vision to Hawke’s Bay. “We’ve got to be like a centipede walking on every leg we can find”.