Whenever the overall prosperity and growth potential of the Bay’s economy is discussed, much of the attention focuses on the farming sector. Observers say that agricultural activities of all kinds, including food processing and providing specialised services to the sector, account for 40% or so of HB’s economic output and for about 17% of its employment.

But what actually constitutes this 40% and what is the future prognosis for the sector? If Hawke’s Bay’s growth is so tied to agriculture, how confident should we be in the future? What factors support an optimistic assessment; what factors suggest risk or vulnerability?

An optimistic view of our region’s land-based economic future is illustrated by the mission statement put forward by the Hastings District in its LTCCP: “Hastings District will be the premier land based production region of the South Pacific.” A high aspiration indeed.

But some would offer a less rosy view that takes into account adverse factors ranging from increasing drought, problematic water supply, and depleting soil, to trade barriers, R&D and skill shortages, and foreign consumer resistance to long distance food sources.

And here, from an analysis prepared for the HB Regional Council, is a middle ground forecast: “With its natural endowments Hawke’s Bay is well positioned to capitalise on the growing world demand for high quality food, especially from the expanding middle class in Asia. As a consequence the region has the potential to outperform the national economy and grow at 2.8% or thereabouts from 2011 onwards, However, the weather is the wild card and although our forecasts account for occasional dry spells we are unable to predict when they will occur with any precision. The impact of climate change is also not clear and a drying of the east coast may eliminate Hawke’s Bay’s higher growth potential.”

Who’s right … the optimist or the pessimist?

This article attempts a sort of “risk assessment” of the land-based economy of Hawke’s Bay.

Start with the land

Perhaps the obvious place to begin is with the land itself, on which all else depends … and what might threaten it.

Hawke’s Bay consists of roughly 1.4 million hectares, of which nearly 1.3 million hectares are devoted to growing things, from sheep to trees and grapes. Pastures and forests consume the lion’s share of the land, with orchards/horticulture occupying only 21,000 hectares, and vineyards about 6,300 hectares.

Some believe the land itself is in serious jeopardy, threatened by inadequately constrained urban development, especially as growth infringes on the Heretaunga Plains. Certainly the recently-formed Land Protection Society holds that view, but the concern reaches far beyond that group. For example, reporting on response to its questionnaire to ratepayers on future scenarios for the District, HDC notes that “Tightening land use rules to inhibit urban sprawl” was the top concern.

Much of the productive land in the region lies within the Hastings District. And at the top of every recent list of strategic priorities issued by the Mayor and Council lately, you will find statements like these from the LTCCP: “Our immediate priority is to manage our plains resources and urban development appropriately.” Or: “Developing a new District Plan to preserve the productive capacity of the Heretaunga Plains is our immediate priority.”

Just a week or so ago, the Governance Group consisting of mayors and councillors from the Hastings, Napier and Regional Councils met to approve a workplan for the so-called Heretaunga Plains Urban Development Study. Mayor Yule outlines his vision for the project in his Guest Buzzmaker article. Allan Baldock, in his article, explains the skeptical position of the Land Protection Society.
[Note: Both articles on BayBuzz website]

Watching the Hastings Council deal with land use issues lately in specific cases affecting Plains land – from sports park to retirement villages, big box stores to golf resorts – one cannot see that the Council itself has yet discerned a consistent path.

Many eyes and expectations will be focused on this initiative. Arguably, no policy initiative will have more impact on the Bay’s land-based economy, since obviously the land itself is a finite resource and its productive acreage represents the ultimate constraint on agricultural growth.

Declining soil quality?

But protecting the land, the ‘golden goose” of Hawke’s Bay, from a regulatory standpoint is only part of the equation. Hugely important is protecting – and many would argue, re-building – the quality of the soil itself.

Hawke’s Bay, obviously not alone in the world, has now had about sixty years of chemically-oriented farming. Within the last twenty years in New Zealand, our farmers have used 600% more urea, and their production has not lifted even 50% in that time. Meanwhile, the data indicate the vitamin and mineral content of our food has declined 60% in sixty years. Old-timers would say taste has suffered as well.

This hardly sounds like a viable long-term business model, let alone a sustainable approach to using the Bay’s precious land resource. Nor have we even touched upon the impact of these practices on our water quality.

In their articles in BayBuzz Digest (both available on BayBuzz website), Phyllis Tichinin and Mark Sweet offer their critiques of the traditional chemical farming approach now dominant in Hawke’s Bay. I won’t repeat their analysis here. But they also point out a number of farmers and viticulturists who are taking alternative approaches based upon re-building the quality of the soil, even as it is used. Phyllis notes that approximately 40,000 hectares in Hawke’s Bay are practicing some form of “biological” farming. And Mark emphasizes an additional “windfall” benefit of restoring the soil – because best practices involve restoring the carbon content of the soil, they can actually open the door for farmers to earn carbon credits, as opposed adding to the nation’s carbon emissions deficit.

It would seem to be simple common sense that our local elected officials and policy-makers, as devoted to the Bay’s land-based economy as they are (and should be), would move protecting both the quantity and quality of our land and soil to the very top of their agendas. The rhetorical commitment has been creeping up the scale lately, but adopting and enforcing the required policies is a different matter.

In short, if our local officials envision a blossoming future for the Bay’s land-based economy, they will need to come to terms with educating and even, heaven forbid, regulating farmers.

If farming practices are being used that can be documented to be degrading soil quality, why should those practices be condoned? Our society does not (or at least so the law says) permit other industries to degrade our air or water or land. In these other sectors we do not rely simply on “education” and voluntary protocols. Why should we permit the farming industry to ruin “our” soil. And there’s the issue … from a societal perspective, whose soil is it, anyway?

Let it rain

Protecting our soil, in quantity and quality, is only half the battle for sustaining a prosperous land economy in the Bay.

The other half of the equation involves water.

At the highest level, the trends are set, and won’t be adjusted for generations, however assiduously we try. Global warming means less rain for Hawke’s Bay. A report for MAF in 2007 said that year’s drought would drain $700 million from the Bay’s economy over three years. A few days ago, a Ministry spokesman put the number now, after successive droughts, at “well over $1 billion.”

What does that actually mean? Take, as just one example, the meat processing industry, which employed 3,270 people in HB in 2007, produced 4.5% of the region’s GDP (and accounted for almost 13% of all NZ’s meat processing), and represents 27% of the region’s exports. Drought means reduced stock levels and then fewer animals for the works. Recent media reports indicate that, as a consequence, HB processors are already advancing their normal winter slow-down and shut-down schedules. The result: lower worker incomes, even job losses, and fewer export sales. One job loss in this sector can generate 2.3 additional job losses across the region in other sectors.

So, the stakes involved in water use are huge. In the near term, the least we can do is get a lot smarter and environmentally mindful about how we manage the water we do have here in the Bay. This requires three steps: 1) intelligent allocation of water use; 2) prudent development of water harvesting and storage capacities; and 3) vigorous protection of water quality, especially as it is impacted by farmers’ land use practices.

Lately, the Regional Council is talking a good game in each of these areas. But once its ten year plan is adopted, actions will need to match the rhetoric. Recently, the Council has cracked down on water consent holders who have not been reporting their water takes in a timely manner or accurately. More systematic and reliable water metering will be introduced. Minimum water flows in our rivers will be re-evaluated against the concern that current standards provide inadequate water quality protection. Better information will be developed about the impact of both surface water and direct water takes on our underlying aquifers, so that these takes can be more intelligently regulated.

To increase usable water supply for farming (i.e., for subsidising our land-based economy), water harvesting and storage schemes will be pursued. The implication has been that the Regional Council will “invest” in such schemes, but clearly, public/private cost allocations, based upon appropriate weighting of private gain versus public good, will need to be debated. 

Finally, the benefits of water use and supply given to farmers must be reciprocated by farmers’ commitment to protect the quality of the region’s waters. Intensive use of chemicals, soil erosion, and stock effluent are farmers’ main “contribution” to the region’s water ecology. In other regions, like Canterbury, there is now evidence that nitrate discharge from agricultural land use is having a negative impact on the quality of groundwater, in some situations exceeding drinking water nitrate standards.

Whatever form the pollution caused by farming takes in Hawke’s Bay, if it violates regulatory standards, enforcement action should be aggressive, with maximum penalties sought. If the public’s water is to be used to support the privately-owned land-based economy, then the public’s asset must be fully protected. At a national political level, as in the case of  dairying, for example, voices from the Agriculture Minister to Local Government NZ are beginning to warn that farmers will need to face up to higher environmental standards and “more regimented enforcement.”

If we don’t give up the land, degrade its quality, or squander and ruin the water, can we then look forward to a viable agriculture economy in Hawke’s Bay?

Well, maybe.

Innovation and externalities

As we’ve seen, arguably the most important risks and threats to our Bay land economy are of our own making. These dangers can be avoided, mitigated or eliminated. Here locally, we can choose to re-build our soil, choose to protect the Plains from non-agricultural uses, choose to conserve water and guard its quality. These are matters of political will and application of known best practices. No black magic required. They can be addressed by us, right here in the Bay.

Some other factors are at play that also must be addressed, but these are not as much under our local control.

A good example is innovation in the agricultural sector. To be sure, there are many innovators in this sector in the Bay. Phyllis Tichinin and Mark Sweet identify just a few I their articles.

But there’s also plenty of commentary about a looming talent or skill crisis in NZ agriculture … from a dearth of young people wanting to take up farming to the dwindling supply of individuals highly-trained in the requisite sciences. The agriculture sector is filling around 65% of its advertised vacancies.

As Hastings Councillor Mick Lester has written in an earlier BayBuzz Digest: “Without the continual infusion of new talent into the agricultural sector, we will see it left in the hands of an ever-aging and diminishing population of farm owners and workers. This will inevitably lead to a lack of enthusiasm and new ideas which are so essential if we are to continue to lead the rest of the world in the efficient production of protein.” Others have written of a fading generation of scientists and researchers who were true students of the life sciences that underpin innovation in the agricultural sector. Alone, Hawke’s Bay schools, from elementary through EIT, can only do so much to nurture these skills and enthusiasm.

Innovation comes not just in the form of scientific insight into soil chemistry or plant and animal genetics. It is needed equally throughout the “food chain,” including food processing and packaging, new end-products (like the pharmaceutical products created from animal blood by local Southern Lights Biomaterials), higher-value “boutique” and specialty food products, food marketing, and mitigation of environmental impacts.

At a national level, the latest budget proffers a fund, the Primary Growth Partnership, that will receive $190 million over the next four years to boost innovation in the primary and food sectors. The funding will apply to pastoral, arable, horticulture, seafood, food processing, climate change, forestry and wood. Pundits are arguing over whether this is enough. In any case, one can only hope that Hawke’s Bay councils and enterprises compete effectively for our share.

But R&D funds will lie fallow if we don’t have the talent to use them. Ministers Tolley (Education) and Carter (Agriculture), what say you to this?!

Finally, let’s turn to a couple of “externalities” or outside factors that importantly affect the viability of HB’s land-based economy.

Externalities

Because the preponderance of the Bay’s agricultural output is exported, the region’s land economy is highly vulnerable to global trends and attitudes over which we have very little control.

Our foreign “customers” can quarantine our fruit on bogus grounds and subsidise their farmers to price us out of the market (as is the case, most lately, with dairy products). Or, where indigenous resources permit, they can copy our best practices and produce more competitively themselves. Or foreigners can screw up the global financial system, affecting our currency and credit access. Oil prices, and therefore transport and costs, can gyrate widely, but with a relentless upward trend.

And then there are those pesky – and fickle – foreign consumers, who abandon higher-priced organic foods (where NZ could try to make its reputation) in droves when their economies turn sour. The New York Times, for example, recently headlined the collapse of the organic milk market in the States.

Or they worry about the carbon emissions associated with transporting our food products around the world to European or North American markets, despite the evidence that, even with transport, we produce food more energy-efficiently.

There’s not much we here in Hawke’s Bay can do about such factors, other than hope our national leaders protect our interests as best they can.

But perhaps the one thing we can do regionally is contribute our bit to justifying and sustaining the “Clean, Green” reputation that provides a crucial underpinning to our ability to market our food products abroad. That reputation must be earned and supported day-by-day in our growing practices, in our stringent protection of our environment, and even in the way we showcase our coasts and rivers and rural environment to foreign visitors.

As David Cranwell suggests in his article in BayBuzz Digest (available on BayBuzz website), our food export competitiveness begins with quality – meeting and exceeding the toughest standards that major foreign buyers can place on their suppliers. A superior product is where our reputation begins. High productivity off the land – where our biological farmers are showing the way forward – then adds to our competitive advantage. And finally, the “halo” effect of producing from a distant land rumoured to be clean and green – a mecca of sustainable practices – adds the final glow to the New Zealand agriculture brand.

We in Hawke’s Bay have a substantial ability to contribute to each of these necessary ingredients for fostering the future success of our region’s land economy. The choices are ours to make.

Agriculture in Hawke’s Bay – Primary Facts

 

 

 

 

Average Annual Growth in GDP

2002-2007

2007-2011

Agriculture

7.7%

3.0%

Fishing

-12.1%

-2.0%

Forestry & Logging

2.1%

1.5%

Food, beverage manufacturing

3.4%

2.3%

Wood & paper products

5.8%

1.2%

Total GDP

4.3%

1.5%

 

 

Agriculture Share of HB GDP

2007

2011

Agriculture, forestry, fishing

17.3%

18.2%

Food, beverage manufacturing

16.2%

16.8%

Wood & paper products

2.9%

2.9%

Total Agriculture Share

36.4%

37.9%

 

 

Employment Growth

2002-2007

2007-2011

Agriculture

0.1%

0.8%

Total – all sectors

2.5%

0.2%

 

 

Employees related to Agriculture

2007

 

Services to agriculture

3,341

 

Meat processing

2,822

 

Apple & pear growing

2,017

 

Fruit & vegetable processing

1,648

 

Sheep farming

1,467

 

Sheep-Beef Cattle farming

918

 

Fruit & vegetable wholesaling

554

 

Total – Agriculture

12,767

 

Total – All sectors

74,697

 

Percent employed in Agriculture

17.1%

 

Join the Conversation

1 Comment

  1. Totaly unrelated to this article, but the Seagulls at Henderson Rd Transfer Stn, are squawking out loudly, about all vehicles being weighed in and out, and are going to be charged something like $130 per tonne, to drop off the household waste/rubbish…..looks as though the the country streets of HB, are going to suffer huge drop offs of waste……again!! not to mention our waterways.

    Later this month apparently.

    Cheers.

    Wills.

Leave a comment

Your email address will not be published. Required fields are marked *