How can the New Zealand Government make it easier for farmers to link into value chains?

Abstract

The Ministry of Foreign Affairs and Trade plays a vital role in contributing to the Government’s goal of lifting exports to 40 percent of GDP by 2025. This involves developing stronger relationships with New Zealand exporters and supporting them to add and capture value from existing markets through supply chain integration, brand promotion and brand protection (State Services Commission 2013). New Zealand red meat exports play an important role in this as they represent 11% of total merchandise exports (Statistics New Zealand 2013).

A significant proportion New Zealand’s red meat is still exported in commodity form and fails to achieve a premium for the attributes of its New Zealand origin. Changing this requires a co-ordinated effort from government, exporters and producers. Market access and promotion of the NZ Inc brand story can create opportunities for New Zealand exporters but capitalising on these requires companies to develop capabilities and strategies to market and deliver these products to demanding international consumers. In addition, it is necessary to have farmer suppliers who can produce the right quality of product when the market requires and who are committed to long-term supply relationships. Without these integrated supply chains New Zealand agricultural exports will continue to be dominated by commodities. This research has focused on several agricultural exporters and their suppliers who have developed relationships with high-end retail customers and have a strategy in place to add value to their products.

Consistently meeting consumer demands is difficult within the constraints of New Zealand’s pasture-based agricultural production systems, as production volume and product specifications are highly dependent on climate. It is also difficult when the relationships between suppliers and their processing/marketing companies are dominated by short-term spot market relationships. This research, therefore, focuses on how to enable more New Zealand firms and their suppliers to overcome these constraints and participate in integrated value chains

The research aimed to identify: • The characteristics of long-term successful supplier/processor/retailer partnerships in agri-food supply chains • The characteristics of the participants; it also looked at how these long-term partnerships created value through co-operation • What enabled long-term co-operation to occur, as opposed to short-term, opportunistic behaviour.