Enhancing value for New Zealand farmers by improving the value chain

Abstract

This report explores the opportunities for New Zealand farmers to increase their returns through higher value added for their products. The paper explores the international context in which New Zealand trades its agricultural products. Historically, market access has been a major issue for New Zealand agricultural exports. This is still an issue, but there has been a relaxing to trade restrictions allowing greater access to some markets as well as growing opportunities in the emerging markets. The change in agricultural policy which has led to the reduction in market distortion, especially in the EU, but also in Australia and the US, has given opportunities for New Zealand exports. However, there has been a switch of emphasis of this support towards support for social and environmental outcomes. These changes, alongside the growth in market assurance schemes from retailers and other market gatekeepers, have increased the requirement for products to meet various social, environmental, and welfare criteria. There are three potential options to improve the value added of agricultural products: better positioning of existing exports in overseas markets, value added processing, and niche production and marketing. The paper discusses these options and also the challenges New Zealand agricultural producers may face implementing them. The changing international environment for New Zealand farmers does bring challenges but also opportunities. New Zealand famers have the potential to enhance the value of their production by ensuring its attributes are recognised in the market place, and the maximum value obtained for these. This requires attention to the attributes that markets are willing to pay for and ensuring that this value is captured and transmitted down the value chain.