Agribusiness morale crashes, leaders struggle for strength to fight another day: KPMG report

Fieldays at Hamilton's Mystery Creek attracted 128,700 visitors in 2019, the last time it was held, and posted sales of $549m. Photo / NZME

Agribusiness morale has fallen steeply in the past year as the pressures of labour shortages, shipping challenges and the unprecedented speed of regulatory change sap the strength of the sector's leaders, says KPMG global head of agribusiness Ian Proudfoot.

The author of the KPMG Agribusiness Agenda, delivered at a business leaders' breakfast at the opening day of Fieldays today, said fatigue from Covid-19 impacts and increased regulatory change had made the report the most difficult ever to write in its 12-year history.

There was a fundamental pressure on leaders and it was clear from conversations that industry morale had fallen significantly, New Zealand-based Proudfoot said.

Fieldays at Hamilton's Mystery Creek is the largest agricultural event in the Southern Hemisphere. This year's event from June 16-19 inclusive is the first live event of the annual exhibition since 2019, due to the pandemic. In 2019 the event attracted 128,700 visitors and posted sales of $549m.

"We could sense anger during our conversations, particularly in relation to the labour shortages the sector faces. At times it felt as though we were talking to leaders who were primarily focused on finding the strength to fight another day, rather than the energised leaders of previous years.

"The practical labour and shipping challenges that Covid-19 has created are consuming most executive time and effort. The speed at which things are changing is unprecedented and very often means that the appropriate decision in the morning needs to be revisited in the afternoon."

Ian Proudfoot, KPMG global head of agribusiness and author of 2021 Agribusiness Agenda. Photo / File

Proudfoot said the pace of regulatory change was also greater than in recent years, and expected to speed up as the Labour Government looked to implement its transformation agenda.

"Each new rule brings new compliance and reporting requirements and often requires changes to core systems.

"Change is good for our country; however the point was made that it is the breadth of change that is stretching many organisations.

"In addition to this, the Climate Change Commission's final advice on farming has also presented pressure for the sector to do its part, or even do the heavy lifting for New Zealand."

Proudfoot said for these reasons it was the first time in the writing of the KPMG Agribusiness Agenda that there were tangible concerns over the ability of New Zealand organisations to engage in "the great big beautiful tomorrow" emerging rapidly across the global agri-food sector.

The question was could New Zealand connect to this world of opportunity?

"There is a global food renaissance happening right now and we strongly believe that the ability to connect and participate in the future of food at scale remains available to New Zealand organisations.

"However the people that can make this happen, executive teams across the industry, are the same group of people that are currently under significant pressure dealing with the day-to-day challenges of their business," Proudfoot said.

This year's report recognised the industry was operating under extreme pressure.

But it also flagged great potential for New Zealand agribusiness to be highly involved in shaping the global food renaissance.

"Our message this year is clear - it is crucial we invest in enabling our current leaders to secure the critical seats the country needs at the top table of the future food system."

Proudfoot said the pandemic had highlighted the lack of depth within many executive teams. The executive bench needed to be strengthened.

Maintaining and developing networks and relationships over the past year had been challenging. Personal elements of face-to-face meetings had been lost.

"It is critical our leaders have the time to reinvest in key networks and relationships. Without taking this time, there is a risk we are not engaged in key initiatives for our future, simply because we are out of sight and out of mind."

The challenge for agribusiness directors and governors was to ensure they focused on governing with a growth mindset.

On the issue of regulatory pressures, the agenda's conversations with agribusiness leaders revealed a simple ask to Government: "please ensure that work is co-ordinated across agencies so that consultation occurs and regulations are drafted in a way that reduces the burden on executive time".