What Will Change Farming in New Zealand? Agrifood Experts Rank the Issues, with Climate Change on Top

The latest edition of the ‘Matrix of Drivers’ report finds that primary sector leaders agree climate change is the key challenge most likely to change land use in New Zealand, again placing it significantly higher in importance than all other factors, including the ongoing impacts of the Covid-19 pandemic.

The Matrix of Drivers: 2022 Update presents an up-to-date summary of 35 global issues, trends and innovations (the ‘drivers’) with potential to influence the agri-food sector in New Zealand.

The report contains four elements that together provide market intelligence and foresight into consumer trends and international agreements. The 2022 updates are outlined below:

• 35 key influences, ranked by experts
• Open-access evidence base
• International consumer preference studies
• Eight future trends and challenges

Industry bodies and agribusinesses can use this research to assess the challenges affecting their sector, anticipate change, and assist producers to adapt. Primary sector producers and entrepreneurs can use this research to meet market demands or develop new land-use opportunities.

The report was produced by the Agribusiness & Economics Research Unit (AERU) at Lincoln University with funding from the Our Land and Water National Science Challenge.

35 key influences, ranked by experts

The research team identified 35 key drivers likely to impact farming in New Zealand. An initial list developed in 2016 has been expanded with each edition of the Matrix of Drivers report series, with one driver (public health) added in the 2022 report.

To assess the relative importance of these drivers, in November 2021 researchers surveyed agri-sector leaders, policymakers and academics, who were asked to rank the most critical challenges and issues.

Survey participants were first asked to freely list the most critical issues with potential to influence New Zealand land-use change or practice. With no prompting, climate change was identified as the most important issue by a wide margin, similar to the previous survey in 2019:

When asked to rank the key drivers identified by the research team, climate change was also significantly more important to participants than any other international issue. Participants also ranked GHG emissions, condition of the environment, and water quality as international drivers that would have a high impact on land use in New Zealand.

When analysing the survey results to include only respondents who identified themselves as very knowledgeable or knowledgeable about international markets for New Zealand food exports – predominantly those working directly in the primary sector ­– climate change was still considered the most critically important factor by a very wide margin among experts on all markets.

Domestically, water quality was again indicated to be important to more participants (closely followed by climate change) than any other domestic issues. Condition of the environment, agricultural policy and greenhouse gas emissions were also identified as important drivers.

Five issues more than doubled in relative importance from 2017 to 2021:

• Climate change
• Extreme weather events
• Māori values
• Cultural values
• Soil quality

The survey also asked participants to consider the product attributes that can help achieve higher value from a lower volume of exports. Most participants viewed the attributes of high quality, lower environmental impact of production, food safety, and low carbon footprint as very important.

The survey was distributed to 2818 people in total, receiving 622 responses, including 251 completed surveys.

Climate change was considered the most critically important factor by a very wide margin among experts on all markets

Open-access evidence base

The Matrix of Drivers: 2022 Update report provides open access to its evidence base, with clear and well-organised links to credible, relevant primary sources of evidence about primary sector trends and challenges.

The compiled evidence base includes 1500 international and domestic sources of information, selected through an academic literature review process. This process included key strategic and regulatory documents from New Zealand’s government and regional agencies, and information from primary sector groups and farmer associations.

The 2022 report expanded upon previous literature reviews, with an examination of the latest reports produced by key organisations such as the United Nations (including the FAO and IPCC), as well as academic literature. The review also identified literature that demonstrated how these drivers may change over time, drawing on trade modelling, consumer attitudes, and behaviour research.

International consumer preference studies

The Matrix of Drivers: 2022 Update report also includes a review of international consumer preferences studies, providing evidence for the range of premiums that New Zealand export customers are willing to pay for attributes such as organic certification.

This literature review (Appendix A of the report) has been updated to include a total of 83 studies relevant to the drivers, covering academic literature published up to 2022.

These studies have been added to Our Land and Water's new International Consumer Preferences: Evidence Finder, where they can be searched by region, country, sector, product, and credence attribute.

Eight future trends and challenges

Eight categories of future trends and challenges were identified by the research team as having high potential to impact land use in New Zealand in the coming years:

1. Climate change, noting many extreme weather events since the previous report, the launch of the Global Methane Pledge and increasing strength of language and urgency in new IPCC reports and COP26 outputs, and the steady implementation of climate policies internationally and in New Zealand. Pushed by climate change, there has been strong movement within the banking and investment sector towards sustainable finance since the previous report.
2. New Zealand’s environmental policy, with increasing scrutiny of Significant Natural Areas and the implementation of freshwater management policy.
3. Covid-19, which has both challenged and demonstrated the resilience of New Zealand’s primary sector, with export revenue rebounding despite labour shortages and supply chain disruption.
4. Global trends and challenges to address food waste and the Sustainable Development Goals. Volatile commodity prices and inflationary uncertainty are also likely to have a continued impact, although population growth remains the main driver of consumption of animal protein.
5. Emerging technologies, with continued development of electric farm vehicles, blockchain technology, robotics, GHG mitigation technology, and increasing international adoption of precision agriculture, gene-edited crops and regenerative agriculture.
6. Innovative products and new food technology, with the continued development and expansion of food products created from alternative protein sources and cellular agriculture.
7. International trading environment, as we continue to respond to Brexit, develop and utilise new free trade agreements, and navigate tensions in geopolitical relationships.
8. Consumer trends, such as increasing demand for social and environmental attributes, conscious reduction in meat intake, and food-purchasing changes (such as increased online shopping) accelerated by Covid-19. Demand for organic foods continues to increase, and consumers are increasingly interested in the cultural provenance of their food, which can add value to Māori agribusiness.

See section three of the Matrix of Drivers: 2022 Update report for more detail on these future trends, with references to primary sources of evidence.

More information:

• Read the full report
• Open-access evidence base
• The 35 drivers, linked to factsheets:

• The Matrix of Drivers project
• International Consumer Preferences: Evidence Finder ­– interactive table
• Infographic and slideshow direct links
• See The Value Project for case studies and resources about generating value through responding to consumer preferences for sustainable products