Features and problems of new primary industries : a case study of the Canterbury honeydew industry

Abstract

The New Zealand economy is largely dependent on agricultural export, traditionally sheepmeats, wool and dairy products. Changes in available overseas markets, consumer tastes and eroding competitive advantages have led to reductions and instability in this export base. Three approaches to reducing this dependence are available. These are: intensification of production, large or small scale industrialisation or diversification of agriculture.

Diversification of agriculture may occur in production, processing or marketing. All three options are currently being emphasised in New Zealand agricultural policy. Production orientated diversification is an option that is particularly appealing to the self image of New Zealanders as it tends towards small rural-based firms with an emphasis on low capital investment and operation ingenuity. For this reason, a host of new primary industries have emerged, many of them based on previous under-utilised resources.

Some emergent primary industries succeed and some have become major export earners. Often, however, the industries follow a cycle of early speculative enthusiasm and later failure. The direct financial costs of this failure are small, but the indirect costs may be large. Indirect costs result both from the social costs to the operators of the firms and the possibility of foreclosing the option of establishment of a valuable export industry.

This project considers the motivations and mechanics of emerging primary industries. It analyses why some firms and industries succeed and others fail. The costs of failure are analysed and an investment model for future avoidance is constructed. The sorts of investments that firms and the nation can make to avoid failure of emergent primary industries are identified and their implications considered.

The beekeeping industry dependent on the Canterbury honeydew resource is analysed as a case study. The resource and its industry are described. The aims of the product, from the stance of the firm, the industry and the nation are considered and the obstacles to achievement are detailed. Reflection upon this case study is useful in understanding the need for and needs of emerging primary industries.