2023 KPMG Agribusiness Agenda

• Sector leaders believe there is significant anxiety about the future.
• Perceptions of climate change have changed with recent weather events, and our food and fibre production systems are not as resilient as they need to be.
• We must accelerate the thinking around different farming systems, potentially in-dooring some of what we do and investing in climate tech and biotechnologies.
• There is a concern that many of the regulations that are coming, or people believe are coming, contribute to sector anxiety. Clear pathways are needed.
• We must continue to address the present labour issues while keeping our eye on our future leaders to ensure they thrive and grow.
• The need for world-class biosecurity is the highest priority for industry leaders for the 13th consecutive year.
• Signing high-quality trade agreements recorded the second-highest score of 8.42, up from 8.14 in 2022.

The 2023 KPMG Agribusiness Agenda report (The Agenda), called Energising a World of Anxiety, reflects the fact that there are massive opportunities in front of Aotearoa’s food and fibre sector. However, there is a deep sense that people are struggling to connect to what that future looks like, and there is a need for a boost of hope and energy to move forward.

KPMG’s Global Head of Agribusiness, Ian Proudfoot, says it’s been another challenging report to write because so much is happening but no clear pathways forward.

“Amongst the many current sector leader roundtables we held, it was clear to me that the leaders believe that there is significant anxiety about what the future holds across the sector and concern about whether the sector and their organisations have the resources, capabilities and skills ready to respond to what lies ahead.”

In preparing the insights for The Agenda this year, we engaged with current leaders as well as emerging leaders, asking them the same questions in the annual KPMG Agribusiness Priorities Survey and hosting a forum for emerging leaders to discuss what needs to be done now to create the future they envision for the sector. 

Leaders are leading the converted, but work is needed to engage the unconverted in the sector around the full extent of the opportunities available, connecting them to hope.

Proudfoot says that current leaders are connected to the future; they understand the opportunities in front of the sector and how it could grow, but it is a genuine concern that only some are connected to this vision.

“We have a group of leaders talking about the opportunities; they are excited and energised about the future. However, many are unconverted, lacking confidence that there is a brighter future for the sector beyond the change they are required to make in their businesses. Sector leaders must help them, ensuring strong leadership at the grassroots level – talking to people and helping them understand the opportunities for their future businesses.

Contributors suggested that uncertainty around the pathways for change is a significant factor in anxiety. Communicating a path towards a better now rather than taking years to find the perfect solution, complete with answers to every frequently asked question, is critical to providing hope and energising people to act.

Reference was often made to the upheaval of the 1980s when the government withdrew subsidies from farmers.

“Current leaders remember the impacts on their parents, communities, and friends at the time. But strong leadership has seen a phoenix grow out of the ashes, with the sector becoming the $50 billion-plus export industry we know today, creating wealth that benefits every New Zealander – not just those within the sector. Strong leaders at the time were prepared to stand up for the direction of travel and the opportunities that lay before them despite not having all the answers available at the time.”

The Agenda also reveals extensive discussions about people and the need to attract and retain those passionate about the sector who want to play a role in realising its future potential. This was an important issue for emerging leaders but a lower priority for current leaders this year.

Current leaders are focused on how they fill short-term needs through immigration settings while emerging leaders are focused on building a talent pipeline. Both are important and should happen simultaneously, but there is concern from emerging leaders that developing people has dropped out of the top ten priorities for current leaders.

“We must continue to address the present labour issues while keeping our eye on our future leaders to ensure they thrive and grow. Emerging leaders want opportunities – training, development, and career advancement pathways. They want careers that can show what they’re passionate about,” says Proudfoot.

The industry has plenty of ambition to step into the future. There is a desire to plug into vibrant innovation systems, have certainty over the regulatory framework and have confidence that the necessary investment will be made into infrastructure that will enable them to realise their ambitions.

What became very apparent during those three weeks of ‘summer’ that saw the Auckland floods, Cyclone Gabriel and a significant drought in the South Island was that our food and fibre production systems are not as resilient as they need to be if we are to live and operate in a world where destructive climate events become the norm.

Perceptions of climate change have shifted drastically since last year, and there’s now concern that we have been focused too much on measuring and offsetting climate change rather than thinking about how we respond to create resilience so that we can work effectively in a climate-disruptive world.

“We must accelerate the thinking around different farming systems, potentially in-dooring some of what we do, and investing in climate tech. That thinking must happen quickly and be inclusive, so it takes everybody with us towards a climate-resilient future.”

Biotech is a top ten priority for the first time. There is already a substantive, although informal, conversation underway on gene editing and other biotechnologies due to growing frustration that politicians have, been unwilling to lean into this debate.

“Everyone wants to have that conversation whether politicians are with us or not – that’s something now that’s become unstoppable, and there is a strong desire to act on the outcomes of the discussions,” says Proudfoot.

The bar to achieve trusted status is not static. It is consistently rising. The industry’s regulatory platform must be collaboratively designed with the people and organisations it regulates to deliver credible outcomes for our communities and markets. Trade practices must benefit more than just the exporter, while the rapid emergence of Generative Artificial Intelligence means credible data must back every action.

The Agenda reveals that there is a concern that many of the regulations that are coming, or people believe are coming, are contributing to anxiety in the sector.

“The consequences highlighted by contributors included low confidence, reduced resilience, and deteriorating mental health of people across the sector. It’s slowing down investment; it’s putting people on hiatus in their business to wait to see what’s coming. It’s not empowering, and it’s not unlocking the sector’s potential.”

While it is recognised that regulation is critically important to enable us to trade in international markets and protect our licence to operate, there was a real feeling that we need to focus on bringing through the right regulation.

To build trust and energise the sector, rule makers must collaborate with the people that are going to be regulated to ensure the rules work and then make sure that when we do introduce a new regulation, people understand it and understand why it has been put in place and what needs to be done to comply,” says Proudfoot.

We’ve seen a rise in the priority of feeding our five million first. It is increasingly seen as critically important as it goes directly to the sector’s operating licence. It is a clear equity issue that the sector can play an important role in addressing.

“I regularly argue that there is no more honourable role than growing food for people. However, when this purpose gets consumed in the anxiety and argument surrounding change, it can be easy to forget the bigger picture and lose the energy that fulfilling such a critical role can and should give to an individual’s mana.”

Proudfoot says it was pleasing to see those in executive roles highlighted “Quickly working to reduce food insecurity in New Zealand” as a top 10 priority, ensuring we focus on feeding our five million first.

“We’re excited by that because we believe this is a transformation for New Zealand as a country and will benefit the sector as well. It needs different business models, but let’s consider what those models look like,” says Proudfoot.

The need for world-class biosecurity is the highest priority for industry leaders for the 13^th consecutive year, with a priority score of 9.06, up from 8.76 in 2022. The point was made that as the impacts of climate change increase, we must recognise that extreme weather events and new temperature norms create conditions for pests and diseases to arrive and become established across the country.

‘Sign high-quality trade agreements’ recorded the second-highest score of 8.42, up from 8.14 in 2022. However, contributors expressed that there is a better opportunity for us to grow trade through refreshing existing agreements to ensure we maintain preferential access and minimise informal non-tariff barriers rather than seeking new agreements.

The need for ‘Objective assessment of tree planting programmes’, particularly plantations with the primary purpose of permanent carbon sequestration, was the highest of the new entries in the Top 10 (coming in at fourth equal with ‘Broadband equality for all), with a priority score up 22% on the prior year.

The need to discuss gene editing has been a background issue in The Agenda for the last few years. Concerns have grown that failing to have the debate puts the industry at risk of irreversibly falling behind competitors. The issue, however, has only now made its debut in the Top 10. The other new entries into the Top 10 relate to accelerating investment in rural infrastructure and maximising the sustainable use of the oceans.

Executives vs Governors: A new demographic identifier was added to the survey in 2023, splitting the population between those with predominant executive and governance roles. Of the respondents, 63% described their role as executive and 37% as governance. The cohorts produced distinctly different Top 10s, with only two priorities ranked equally (both ranked world-class biosecurity first and objective assessment of tree planting programmes sixth). Proudfoot says the results of this lens are interesting.

“We had expected a clearer delineation between operational and strategic priorities, with the executive cohort being more aligned to operational priorities and the governors towards strategic ones. However, we have found that both have their eyes on strategic priorities but are focused on different priorities in many cases,” says Proudfoot.

Emerging Leaders: Overall, the emerging leaders, nominated by current CEOs and leaders across the sector, placed a lower priority on all survey priority statements than the current leaders. There were only four common priorities across the current and emerging leaders’ Top 10 priorities.

Four of the Top 10 for emerging leaders relate to how our sector looks after and treats people inside and outside the industry. Of note, two of the emerging leaders’ Top 5 priorities are related to developing people into and within the sector.

Of note, emerging leaders expressed disappointment that He Waka Eke Noa, which had shown such promise because it represented a real and genuine opportunity for true sector-wide collaboration to resolve one of its biggest challenges, appears to have faltered at the last hurdle.