Philippa Stevenson: A 2020 vision of the Waikato

Picture this. Your hydrogen-powered car cruises along a Waikato motorway through a truly clean and green landscape of small dairy farms and smaller lifestyle blocks.

It's 2020. Between Pokeno and Hamilton there are half a dozen small dairy factories. Tankers roll up to and away from them but there's no staff car park. The unmanned, fully automated factories are operated remotely from a centre in Te Awamutu.

In the heart of Hamilton's suburbs, the giant Te Rapa dairy factory is a theme park and museum. From four taps on the udder of a huge cow statue, you fill your Fonterra souvenir cup with chocolate milk or one of the patented, easy-digest, hyper-nutritional drinks - bone booster, memory maker or super sport.

Without memory maker you don't think you would have made it through your doctorate in bioscience but now, Waikato University PhD in hand, you're headed for the new job at the world's foremost animal genetics company, LIC.

LIC is one of many agbio companies in the Waikato housed on one, vast compound to the east of Hamilton. A monorail connects it directly to the Waikato international airport, which caters for the constant stream of shiny-shoed customers, visitors and wannabe business partners jetting in from the world's dominant economies - China, India and the 45-nation European Union.

Well, maybe that's Waikato 2020, maybe not.

But when the present day Waikato Agbio cluster network hosted a future-gazing panel discussion this week, some of the region's major business leaders painted something like that scenario. If only a few impediments, challenges and problems could be addressed in the meantime.

Fonterra technologies manager, Rupert Soar, suggested that in 15 years' time the country's biggest dairy company would have moved on from its long-time focus on big is beautiful.

High costs of energy and transport would be the major factors that drove the company back to the future - to small plants scattered around the countryside. Nationwide, 20 or even 40 fully automated, unmanned and remotely-controlled plants producing speciality products could replace today's 27 tonne an hour, spray drying monoliths churning out mountains of no-frills milk powder.

With a little help from Livestock Improvement Corporation (LIC) chairman Stuart Bay it wasn't hard to imagine that clustering around the niche factories would be small herds of niche-bred cows. The animals' genetics would have been tailored so they were healthy, content and less polluting, while producing milk that enhanced human health and wellbeing.

Energy and transport constraints could also mean milk would be concentrated on farms where some initial processing could also occur.

New Zealand dairy farmers would no longer be the world's lowest cost producers but would be servicing the world's high-returning, high-tech nutraceutical markets.

Meanwhile, Fonterra would have replicated its manufacturing effort in countries like Brazil and India where factory automation meant it was no longer hampered by educational and cultural differences.

Gallagher Group chairman Bill Gallagher - optimistic that he will see global free trade in agriculture in his lifetime - was equally confident about the future of agriculture in the Waikato because of the region's "beaut, temperate climate."

But the company's future may be less about products and more about ideas.

Fifteen per cent of turnover goes on research and development, mainly software development. But when few customers will pay prices that reflect development costs, the trick to marketing is to "wrap it around a bit of hardware," Gallagher says.

What does the Waikato need to make the dreams come true?

AgResearch chief executive Andy West said the major factors were external - world trade, climate change and population growth.

However, the Waikato could help itself by addressing low standards of education, and improve trade skills and infrastructure.

It needed four-lane motorways between Auckland and Tauranga, contain urban sprawl, remedy its environmental problems and spruce up its airport "because I'm sick of going to Wellington with mud on my shoes - nobody takes you seriously."

The Waikato needed to "build on its strengths, diversify its economy and rationalise its land use," West said.

By 2020, according to Gallagher, the new will have been spliced to the old.

"We're the cow town. But there'll be lots of ancillaries come off it."