The farmer of 2030 embraces change – are you ready?

4 MIN

A deep connection with the land. A natural, rural lifestyle. A desire for mastery of the agricultural craft. What drives farmers hasn’t changed for generations, but how they do it is shifting dramatically.

Right now, farmers are facing global and enduring megaforces that are having a deep impact on their industry. Our third Shift Happens – Future of Agribusiness report released in December shows the most influential of these is rural connectivity – essential to increasing the use of technology and data collection. We asked farmers and growers to share with us those megaforces they perceived as having a large influence on their agribusiness in 2021. Also high on the list are risks to the supply chain, the rise of the ‘conscious consumer’ – those who have a vested interest in where their food comes from and how it’s produced – risks to geo-political trade, climate change, and labour restrictions.

Come 2030, the perception of the most influential megaforces evolves as increased innovation, a greater prevalence of ‘food as medicine’, an enhanced focus on biodiversity, and the continued rise of the conscious consumer are expected to be key megaforces.

The impact of change

But how are farmers feeling about this change, and how smooth is the path to embrace it? The report shows a clear divide between those who feel empowered by change, and those who find it daunting. While 53% of respondents see the changing landscape of the sector as an opportunity for their agribusiness, 47% see it as a threat. Regardless of how they feel about change overall, the clear majority of farmers and growers view the current pace of regulatory change as ‘too much, too fast’, but when it comes to change driven by the market / suppliers, 56% feel the change is ‘about right’.

So how will this explosive transformation play out between now and 2030? Who is the farmer of 2030 and how will they be set up to meet these increasing demands? Here’s what I believe they’ll look like:

• They’ll be innovative and digitally active – creating efficiencies enabled by technology.
• They’ll be highly attuned to the needs of the conscious consumer, and their demand for long-term, sustainable farming practices.
• They’ll work with nature – not only to satisfy demand for sustainable farming – but to leave a legacy for future generations.
• They’ll be incredibly engaged in the conversation about change, contributing to catchment groups and proactive industry actions.
• Finally, they’ll be the same farmers we have in 2021, they’ll just be more prepared for change, with a proactive mindset embracing innovations, research and solutions offered by both the sector and businesses – continually adapting along the way.

Stepping ahead

But how are farmers planning to take the small steps and giant leaps to get to where they need to be in 2030? Our report shows diversifying land use is on the to-do list for many, and use of technology is also on the rise, with more and more farmers exploring innovative ways to increase profitability without the environmental impact of intensive farm systems. Many farmers are also focusing on some form of environmental reporting, and 44% have already or are planning to reduce farm inputs like chemicals and fertilisers.

We know that to enable farmers, as a Bank, we need to play a role in supporting and enhancing the agribusiness of the future too. Across BNZ, we’re building sustainable finance solutions that will lower funding costs for achievement of ambitious environmental, social and governance targets. We’re also helping farmers focus on becoming digitally capable, operate sustainably, and focus on bringing a ‘winning mindset’ to their business.

Starting strong

Of course, none of this is easy. The increasing requirements to improve environmental outcomes requires capital and longer investment horizons. It may necessitate changes to the way some have been farming for decades.

But we’re starting from a good place. Throughout the pandemic, our primary sector has largely gone about its business and continued to grow. New Zealand’s clean, nutritious food remains robust, and our commodity prices are strong. We’ve seen our agribusiness customers strengthen their positions, using the good times to pay down debt and shore up balance sheets. An influx of new money seeking yield has also found its way into the sector. This gives farmers an opportunity to position their agribusinesses for long-term success, supporting the regeneration of land and waterways and the ongoing viability of their businesses.

We’re proud of what the primary sector has achieved and the critical role it plays in our economy. Our farmers have proven time and time again they can overcome challenges, and our agribusiness team is here to support them along the way. After all, the market has spoken and there’s no going back.

You’ll find more in our Shift Happens – Future of Agribusiness report. It’s a snapshot in time, but an immensely important one.

 


 

This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Neither BNZ nor any person involved in this article accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any information, representation or omission, whether negligent or otherwise, contained in this publication. Where opinions are expressed by a specific author in this article, the opinions are the personal views of that author and do not necessarily reflect the views of BNZ.