Life sciences crucial in path to prosperity

9 Jun, 2002 10:00 AM4 mins to read

By WARREN PARKER*

Global food trends expert Professor David Hughes of Imperial College, London, says power in the food industries is polarising toward two groups: those who hold genetic information and those with consumer information.

Companies in the "life science" category have control over genetic information, while food retailers, mostly supermarkets, have data on consumer demographic and purchasing behaviour.

If Hughes is correct then New Zealand's animal industries, as a supplier - rather than retailer - of food and well-being products, should work to strengthen their position in the supply chain through the life sciences to counter the inexorable downward pressure on prices paid to producers.

The business case for life sciences is straightforward. Since the genetic makeup of plants, animals and humans has a high degree of similarity, knowledge gained from the study of one species' genetic material can be very useful in understanding and exploiting value from others. This is one reason why sequencing the human genome was profound. It provided a platform for accelerating gene discovery and product development in the plant and animal industries.

The case for life sciences coincides with the views of leading international speakers at last year's Knowledge Wave conference. They identified the plant and animal sciences as one of New Zealand's few genuinely internationally competitive areas for innovation.

Prime Minister Helen Clark's innovation package announced in February further confirmed this. Biotechnology was listed as one of the three planks for lifting New Zealand up the OECD ladder for living standards.

Life sciences are critical to the long-term prosperity of New Zealand's biological economy for reasons that extend beyond the supply chain polarisation identified by Hughes.

Three of these reasons are compelling in themselves. First, gains by competitors in conventional production technologies exceed those achieved by our farmers, for example, Australian and United States dairying, and synthetic substitutes for wool.

Second, the declining area of grassland and fixed supply of other natural resources, such as water, puts an upper limit on New Zealand's total agricultural production through current systems. Third, the shortage of highly skilled workers constrains farm productivity gains.

These reasons point, too, to the need to urgently increase the profit margins from our plant- and animal-derived products. In the interim, highly efficient, low-cost production of commodities needs to provide the cash to finance the life sciences products and, through these, the transformation of the pastoral industries.

Those championing organics should not be alarmed. Life sciences are not threatening for two reasons: first, there is a small, committed segment of organic consumers - large supermarkets will want to provide for about 2 per cent of buyers, the most recent British research shows. Their needs can be met, as the Royal Commission on Genetic Modification suggested, through the coexistence of alternative production technologies.

Signs of a levelling off in demand, and associated pressure on price premiums as supply grows, are already appearing in key segments for organics. There is also the not insignificant matter of food miles, or the total resource cost from farm to plate, to consider.

Second, on the farm input side, biotechnology enables the development of natural substitutes for chemicals; for example, a natural anthelmintic for internal parasites.

In this regard life sciences provide a realistic chance of resolving a fundamental dilemma - how do you continue to achieve economic growth and its associated benefits and at the same time sustain natural resources on which this growth depends?

Life sciences offer the possibility of New Zealand farmers achieving sustainable economic development by better working with what nature has already provided.

New Zealand needs to embrace the life sciences with enthusiasm to realise the considerable advantages we already enjoy in the plant and animal sciences. And, for those who are concerned about the loss of agricultural scientists, a life sciences strategy provides a realistic pathway to strongly increase the number of science positions supporting our plant and animal industries.

* Dr Warren Parker is science general manager, AgResearch Ruakura Research Centre.

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