Pasture renewal 'key to prosperity'

Billions of dollars could be injected into New Zealand's economy if farmers renewed pasture more regularly, a report says.

The study by Business and Economic Research, An economic analysis of the value of pasture, was commissioned by the Pasture Renewal Charitable Trust to explore the financial benefits of renewing pasture more regularly.

On average, sheep and beef farmers renew only 2 per cent of their pastures a year, and dairy farmers about 6 per cent.

The trust advocates a move away from animal improvements to pasture renewal to lift agriculture production.

The report found pasture was worth $20.5 billion to New Zealand's gross domestic profit, with farmers directly receiving $10.2b.

Researchers explored several pasture improvement models and found farmers could benefit from a 16 per cent increase in their returns, to $11.8b, by renewing 8 per cent of pasture for sheep and beef farmers, and 12 per cent for dairy. That would add an extra $3.2b to the national GDP and potentially created an additional 5700 jobs, the report says.

"Pasture renewal has the potential to greatly increase the productivity of these pasture-based products," it says.

Agriculture Minister David Carter said pasture renewal could unlock significant growth in primary sector productivity.

"Pasture is what all our dairying, beef and sheep farms are based on. It is a multibillion dollar `crop' that has the potential to be even greater."

New Zealand planned to increase agricultural productivity to meet global consumer demand and it was gains like these that were needed to achieve its goal, he said.

Federated Farmers president Don Nicolson said the report highlighted not just the value of pasture to the economy but also the potential lift in productivity.

"Based on the latest payout, an increase of just one tonne of dry matter per year over the 1.96 million hectares in dairy would increase farmgate returns by well over a billion dollars."

Adding water storage infrastructure would also increase the volume and productive value of pasture, he said.

The trust is made up of 17 agribusiness firms that aim to grow the rate of pasture renewal in New Zealand. It says a rate of renewal of 10 per cent a year is ideal to make the most of new pasture benefits for dry matter production, better stock performance, improved animal health and more income.

- © Fairfax NZ News

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