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Delmarva Farmer Columnists
Global lessons from New Zealand farmers (March 31, 2015)
By Ed Kee, Secretary of Agriculture, Delaware
In February, I had the privilege of exploring the fields and farms of New Zealand, an island nation with 36 million acres in agriculture, its primary industry.
I was there for two weeks with the fellows of LEADelaware, our state’s agricultural and natural resources leadership development program, co-sponsored by the University of Delaware and the Delaware Department of Agriculture.
A foreign-study experience is a key part of the LEAD program, with past groups traveling to China and Peru, as part of its mission to improve leadership skills, enhance fellows’ understanding of agriculture, and learn more about the issues confronting our livelihood. We visited more than 20 different farms and an equal number of government, trade association and agricultural university professionals.
New Zealand was a unique learning destination, with an export-based agricultural industry that operates without any direct government financial assistance or influence on price.
Agriculture accounts for 11 percent of the country’s gross domestic product, with 90 percent of its products exported.
The two main islands have a total length of more than 1,000 miles, roughly the distance from Maine to mid-Florida. Of the country’s 66 million acres, 36 million are cultivated, with 27 million in grassland.
This pastoral economy includes more than 65,000 “holdings,” or individual farm operations, averaging 588 acres each.
It is a country of 4.5 million people, 30 million sheep, 6.6 million dairy animals and 4 million beef cattle. Interestingly, 1.1 million deer are farm-raised, with the meat exported primarily to Europe.
New Zealand has also developed a strong horticultural industry of wine grapes and wine, apples, pears, and kiwi fruit.
A smaller but strong vegetable industry sells a wide array of products to its domestic market, with significant exports of potatoes, carrots and other crops.
The dairy industry accounts for the largest share, 46 percent, of New Zealand’s gross agricultural revenue. Major breeds are mostly Holstein-Friesian or Holstein-Friesian-Jersey on 11,400 farms. The average herd size is 386 cows.
New Zealand dairy producers can sell their milk to four co-ops and five privately-owned companies, but the largest of the co-ops, Fonterra, accounts for 95 percent of the production.
Dried milk is the biggest item, exported around the world, with China being the major market.
It is important to emphasize that New Zealand is an export agriculture that operates without any direct government financial assistance or influence on price, a policy dating back only to 1985. Historically, New Zealand shipped the bulk of its farm exports to Great Britain.
Since the days of sailing ships, meat, cheese and butter had been sent to the mother country.
By the 1970s, Great Britain had joined the European Common Market, turning its attention to the agricultural products of its European neighbors and consequently reducing its business with New Zealand.
By the mid-1980s, agricultural prices were at disastrous lows, and the national government was on the verge of bankruptcy from trying to subsidize agriculture and other industries.
The government eliminated low-interest loans to buy farms or develop land for farming; subsidies for fertilizer, weed and pest control; and guaranteed minimum prices for meat, wool and dairy products.
It was a financially and psychically painful transition, but those policy changes remain the foundation of New Zealand’s agricultural economy. Today, farmers run multi-million dollar farm business with no government subsidies.
The government works hard to find and enhance exports and provides a regulatory framework for plant and animal health.
There is also strong support for their agricultural universities. In the end, however, the decisions made by New Zealand farmers are based on what global markets require. Farmers take great pride in being globally successful by being efficient and providing what those markets demand.
New Zealand farmers are great people. They farm in a beautiful country, more than 12,000 miles away from Delaware.
The LEADelaware participants gained a lot from a warm and hospitable people who are competing successfully in world markets.
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