Farmers and the economy stand to gain significantly from the Primary Growth Partnerships (PGP) research and innovation programme, an independent report says.
The New Zealand Institute for Economic Research estimates that, thanks to the programme, by 2025 hill-country farmers could earn an extra $270 a hectare and dairy farmers $600 a cow. Exported seafood could be worth $370 more a tonne, and forestry $190 more a hectare.
The PGP aims to boost the productivity and profitability of the primary sector through shared investment in research and development.
To date there are 18 PGP programmes researching a range of products and processes, from merino wool, forest waste for liquid biofuels, selectively bred shellfish, higher-value red meat and seed development.
So far $708m has been committed to the programmes. The Government's share is $333m, with $375m sourced from industry and co-investors. Funds are released in stages as work is carried out and objectives reached. The actual amount paid out by the Government as its share is $99.8m.
The NZIER report, commissioned by the Ministry for Primary Industries (MPI), looks at two scenarios. Under one "certain" picture, the PGP programme should add $6.4 billion to the economy by 2025. Of this, $2.2b is the projected growth from government investment, and $4.2b from industry investment.
Under a less certain scenario, a further $4.7b might be realised, making a total of $11.1b . This scenario would depend on how successful the research and development was, whether the programmes managed to achieve what is hoped for, and to what degree the innovations are taken up.
"This confirms what I've always said, and that is that the benefits from R&D are huge. A $708m investment should be worth $6.4b by 2025," Primary Industries Minister Nathan Guy said.
"I'm delighted with the findings and especially welcome the returns to farmers. These programmes are important cogs in the wheel of economic growth," he said.
NZIER investigated the 30-year benefit cost ratio of the programmes, showing that for every dollar spent now, the economy will grow by $32.
Guy said additional benefits included environmental sustainability and improvements to health and safety.
"The PGPs are changing awareness of the environment at the farm gate," he said.
For example, Ballance Agri-Nutrients was investigating ways to reduce the amount of nitrate and phosphorus leaching into waterways.
Nelson company Kelly Logging and Trinder Engineers were developing a logging system to work on 40-degree slopes, without the need for workers in dangerous areas.
Aotearoa Fisheries, Sanford and the Sealord Group were developing a fish-trawling system which would ensure that fish are hauled aboard ship alive, rather than dead. This would open up lucrative markets such as Hong Kong where restaurants keep live fish for customers to choose.
Guy said it was exciting to see members of the wool industry work together through the New Zealand Merino Company, a programme to create opportunities using fine-woolled sheep.
- The Dominion Post