Overseas farming opportunities abound
A Government-commissioned report is urging dairy and sheep industry players to seize opportunities to farm offshore.
The report by PricewaterhouseCoopers pinpoints five ''significant opportunities'' in China and six South American countries where New Zealand agribusiness could earn reasonable returns.
Haylon Smith, New Zealand Trade and Enterprise's (NZTE) global agribusiness programme leader, said New Zealand was well placed to benefit from growing world demand for protein but faced land constraints.
''We know that third countries are looking at how they can secure protein supply for their populations... With our expertise in pastoral protein production, there's some opportunities that are relevant for us in countries with similar climatic conditions.''
Smith is taking the report to a number of industry and government players over the next two weeks.
The recommendations are:
1. A US$350m (NZ$430m) global investment fund to develop large New Zealand-run dairy farms in South America, particularly Brazil.
2. A joint venture sheepmeat processing facility in South America using New Zealand best practice and techniques.
3. Large-scale dairy and sheep farming partnerships in China.
4. Establishing a lamb marketing company in China to co-ordinate supply and encourage more investment from distributors.
5. A food safety systems entity in China, using New Zealand compliance and monitoring systems.
Smith said the food safety company concept was already quite advanced with exploratory talks between PwC and Chinese corporations scheduled for next month.
Potential economic benefits from such a venture in China could be more than $450m over 15 years, the report said.
It estimated the lamb marketing venture could create $168m in benefits, but said the rewards of processing sheepmeat in south America were low to moderate compared with the investment required.
With regard to sheep farming in China, the report noted that Landcorp and Chinese firm Shanghai Pengxin had already agreed in principal to run farms together in China.
Demand for mutton and lamb in China was expected to grow 50 per cent in the next 10 years.
Smith said the concept of a US$350m dairy investment fund was pitched particularly at Brazil because it could supply Fonterra's half-owned subsidiary.
He acknowledged there were already New Zealanders successfully farming in Chile, Brazil and Uruguay, but few were operating at any scale.
Excluding Fonterra, ''we don't really have any large scale multi-national farming companies or trans-national farmers that can be approached by third-parties to do developments in other countries'', he said.
The feedback he had received so far was mixed, some ''highly positive, some a little critical on some aspects, more around the ability to execute''.
Smith said NZTE would only pursue opportunities where there was ''significant industry buy-in'' but warned other countries were also aware of them.
''The position New Zealand has at the moment is seen as a trusted protein provider to the world. We're in an enviable space and... the onus is on us to capture those opportunities.''
The PwC report was commissioned by NZTE, with MFAT, the Ministry of Business, Innovation and Employment, and Primary Industries Ministry.
- © Fairfax NZ News
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