What is the key to the New Zealand primary sector going from a low-cost commodity producer to a marketer of high-value consumer goods?
Photo: RNZ / Alexander Robertson
The eyes of most dairy farmers will be on Fonterra later this month as it reports its annual result.
Farmer suppliers who are struggling with low pay-outs and high debt will be anxious to see whether recent increases in global milk prices will result in a higher pay-out.
Fonterra has been criticised by many for not doing enough to add value to its basic product in a global market flooded with milk.
And it's a challenge for the whole primary sector, which exports $37 billion worth of commodities that are worth $200 billion by the time they reach consumers.
Maury Leyland was, until March this year, managing director of people, culture and strategy at Fonterra.
She's now on the steering committee of the primary sector think tank Te Hono - a group of primary sector chief executives and leaders working together with the aim of doubling the value of primary sector exports by 2025.
She says New Zealand has a competitive advantage, but it is not a story we tell consumers very well.
But she says there is a move towards value-added, higher-margin products.
“We often confuse the term commodity with ingredients, I think our country has a strong future in high-value ingredients.”
A more outward-looking attitude will be needed, nonetheless.
“We need some structural change to reach markets and quite quickly. We tend to get caught up in the petty internal politics, internal competition issues and the competition is not here.”
