Fonterra wants money put aside for farm research

The nation's biggest company wants to the Government to wind back the process begun in 1992 by a National Government Science Minister, Simon Upton, when on-farm research was downgraded in Government science funding priorities.

Fonterra chief executive Andrew Ferrier told a Trans-Tasman Business Circle yesterday that it was important the Government invested "wisely and well" in science, because research and development was critical to a first-class dairy industry.

"Regrettably, Government has reduced its on-farm pastoral research and development investment over the past 15 years," he said.

"A major focus for the dairy industry is convincing government to reverse that trend".

The president of the Institute of Agricultural and Horticultural Science (NZIAHS), John Lancashire, earlier this month warned that since Mr Upton's science reforms in 1992, Government funding for pastoral research had fallen by 40 per cent or $60.1 million.

Over the same period, primary sector exports had increased by 75 per cent.

Calling for farmers and scientists to work much more closely together to turn around the cuts in primary sector research, Mr Lancashire noted that fewer than 40 per cent of dairy farmers had voted in favour of an industry levy to fund research. This was despite the fact that the nation's agricultural success had been based largely on research developments and innovations, such as electric fencing, trace element use and pasture cultivar development.

He called for farmers to be more vocal in their support for research, and noted that the Government's biggest science company, Agresearch had lost 20 per cent of its staff since 1992, with up to 70 of these being soil scientists, agronomists and ecologists who worked largely in the field.

Decisions by previous governments to give on-farm research a lower priority state funding of science were partly driven by perceptions of agribusiness and forestry as "sunset" industries, with a declining contribution to GDP. But plans for New Zealand to instead become a world-leading financial sector did not survive the 1987 sharemarket crash, and hopes in the 1990s that burgeoning information technology growth would transform New Zealand into a "knowledge economy" or that it would become rich from genetic engineering did not materialise.

Mr Ferrier said there was good evidence that investments in dairy generated positive returns, and the pan-industry Dairy 21 group had identified priority areas, such as environmental integrity and sustainability, biosecurity, higher protein forage and better use of technology on farms as areas which could accelerate growth.

"One goal is to return industry funding from Government for on-farm research to 1992 levels -- around $60 million -- in three equal steps of $20 million a year," he said.

"This is about backing a winner".

The New Zealand Institute of Economic Research (NZIER) had estimated that hitting the dairy industry's target of 4 per cent productivity growth each year could boost New Zealand's GDP by $2 billion a year in in 10 years or $955 million a year in five years' time.

"This is almost double projections based on historical productivity gains," said Mr Ferrier.

"Export returns from dairying will be worth $2. 8 billion per annum more in 10 years time"

- NZPA