Andrew West: Biology can be our trump card

There is a television advertisement in which "The Creator" gives away resources and major enterprises such as oil, gold and car manufacturing to the countries of the earth in a game show that parodies the biblical Creation.

Each item is given to the country representative who hits a buzzer first. A South African wins diamonds, for instance. When The Creator starts to say "Pineapple Lumps", the New Zealander hits his buzzer and wins that item.

This ad was the subject of an unsuccessful complaint to the Advertising Standards Authority in 2007 alleging it was blasphemous.

But religion aside, I would like to address the broader idea behind this ad: is New Zealand really the unlucky country? Were we unfortunate to end up with biological assets such as Pineapple Lumps when other countries got oil, car manufacturing or an international finance industry?

When you look at the state of car manufacturing or international finance today, would you want to be in those businesses? Even oil does not look so desirable when you consider the barrel of light sweet crude that sold for over US$140 in July 2008 now sells for around US$50.

Perhaps this is a temporary aberration. Maybe the industries that made fortunes in the 20th century will bounce right back after the downturn. Or maybe not. In the end, it may not matter very much to us.

The American Nobel Prize-winning chemist Robert Curl put it this way in 1997: "This was the century of physics and chemistry. But ... the next century will be the century of biology."

Like it or not, New Zealand is in the business of biology, so we need to understand what it will take to be a success in this century of biology. There are many factors that will contribute, but I will focus on three.

First, New Zealand is lucky enough to have world-class biological resources and a "Goldilocks" climate - not too hot, not too cold. That gives us a running start.

We supply products the world needs, and for which demand is nothing like as price or wealth-sensitive as cars or oil. Painful as the fall in the international milk price has been for New Zealand in the last few months, milk has fallen from its peak proportionately much less than oil. New Zealand's net tangible asset backing is not hydrocarbon reserves like the oil industry or mortgages like the US finance industry, but rainfall. While its arrival can be unpredictable, fresh water is the human species' most important mineral.

Second, we have a proud tradition, on the whole, of using our biological resources responsibly but innovatively. We have developed a base of talented biologists and agribusiness people. Of course, we need even more talented people and more science if we are to remain innovative, but we have done well to date.

Third, we need to take a long-term view and invest in our future. In the business of biology, no matter how smart we are, there are natural limits on how quickly we can make things grow and how many seasons it takes to develop a new plant or animal. It is hard to make time go faster, so we have to think well ahead.

We also have to invest well ahead. Instead of investing $100 in a business and planning to get back $110 a year from now, biological businesses invest that $100 and plan to get back thousands or tens of thousands but acknowledge that it will take many years to get that return.

Fortunately, New Zealand's biological sectors have been investing and working to develop agri-technologies that would deliver long-term returns for over a century now. Starting around 1905, work was under way at Ruakura and Wallaceville on the benefits of fertiliser use for plant growth. In 1935, the discovery that cobalt eradicated "bush sickness" opened up the volcanic plateau to farming. By the 1960s, electric fences were widely used and agri-technologies just kept growing from there. In the past 50 years or so, this has led to our agricultural productivity growth averaging over 2 per cent a year - faster than almost any other sector, and this rate of growth is rising over time.

Recent investments in agri-technology development by government on behalf of the public, and by farmers through their levies, have focused on ways to accelerate breeding in both animals and plants. The use of marker-assisted selection and whole genome sequencing are now allowing breeders to identify desirable attributes in animals or plants before they become apparent physiologically.

As one example, the Inverdale gene test allows a breeder to discover if a ram will sire prolific daughters well before the ram is ever mated. As another example, recent genetic analysis has identified the "parents" of white clover that were naturally crossed thousands of years ago, indicating valuable genetic resources in clover's relatives that can be crossed back into white clover cultivars to increase the rate of genetic gain.

New Zealand is not unlucky. We are lucky to be in the business of biology. And with that luck, with talent and with investment, other countries may yet envy our success.

* Andrew West is chief executive of AgResearch Ltd.