Government Reform and Extension Services
General: The election of a new government in 1984 saw a change in policy towards liberalising and opening up the economy; policies which have been continued by subsequent governments. Reforms and deregulation have been carried out that affect all sectors of the economy. For the agricultural sector, the reforms included a removal of all subsidies, a removal of concessional finance to producer boards and to farmers, the restructuring of agricultural research and development and the commercialisation of agricultural extension. After these reforms, New Zealand has the lowest level of subsidisation of its agricultural sector within the OECD, with a producer subsidy equivalent equal to 2% (MAF 1996).
Commercialisation of Extension: Up until the mid 1980s the Advisory Services Division of MAF was a provider of extension and advice to the rural sector on a non-chargeable basis. In 1985, the new government directed Advisory Services Division to become fully user pays within five years. This required a major change in culture for the organisation, as commercial success would demand significantly more business focus and discipline.
In 1987, the Advisory Services Division amalgamated with the Agricultural Research Division to form MAF Technology. This amalgamation was undertaken to better link the science and extension activities, and to gain a better commercial return from research developments. While there were some synergies gained from this amalgamation, there were major cultural differences between the two organisations. The consultancy business was placed under considerable pressure, and many advisors/consultants resigned.
In 1990, the renamed Management Consultancy Service was reformed as a separate national business, still within MAF, but with the intention of corporatising and then privatising the organisation over the following two to three years. Full privatisation occurred on 1 February 1995 when the business, now known as Agriculture New Zealand, was purchased by Wrightson Limited, New Zealand’s largest stock and station firm. At the time of the purchase, only 80 consultants remained. Their number has since increased to 100, making Agriculture New Zealand Limited the country’s largest national agricultural consultancy business. It now operates as a fully commercial but separate limited liability company, fully owned by Wrightson Limited (Ritchie 1995).
Agriculture New Zealand Limited: The core business is on-farm/orchard consultancy to individual farmers and growers, which makes up approximately 50% of their total business compared with 25% previously. Other important business areas are (Ritchie 1995):
- technology transfer, whereby the consultant works with a group of farmers or growers or organisation to enhance and develop existing services or practices using advanced or new technology. An example here is the New Zealand Meat Research and Development Council monitor farms, whereby Agriculture New Zealand Ltd is contracted to facilitate selected "monitor" farms throughout the country where research and new ideas are applied, trials are analysed, and the results are shared with other farmers in the local area; this is an expanding service;
- rural intelligence gathering and facilitation, which is paid for at arms length by the Policy division of the Ministry of Agriculture (MAF);
- training courses for agriculture and horticulture, which are part of the national qualifications network; this is a new service; and
- consultation to agribusiness, where Agriculture New Zealand Ltd is contracted to an agribusiness organisation to help them further understand the business and develop strategies in the agricultural/horticultural sector, or, in other cases deliver advisory services to their clients; this is a new service formerly discouraged.
Comment: With respect to rural intelligence and facilitation, MAF Policy has contracted Agriculture New Zealand Ltd to be its "eyes and ears" in the field, in terms of monitoring change in the rural sector, monitoring the impact of government policies, and carrying out "facilitation" programmes for MAF Policy. An example of the latter requirement would be a series of field days held throughout the country to discuss on-farm risk management as part of changes in government policy affecting government response to adverse climatic events and natural disasters. Another example is the currently ongoing facilitation programme, in which Agriculture New Zealand Ltd is contracted to disseminate information gained from MAF Policy’s sustainable agriculture information programme.
Restructuring of Research and Development: In 1992, the Research Division of MAF, the Department of Scientific and Industrial Research (DSIR), the Forestry Research Institute (FRI), and the research section of the Meteorological Service were split up into ten Crown Research Institutes (CRIs). Government funding for research was centralised in the Public Good Science Fund (PGSF) administered by the Foundation for Research Science and Technology (FRST), to which the CRIs "bid" for research funding. Policy advice to the government on research was to be provided by the Ministry for Research Science and Technology (MoRST). The CRIs were to act on a commercial basis, and seek funds from FRST and/or from private industry. In the agricultural/land research sector, the CRIs are:
- AgResearch — research into pastoral agriculture;
- HortResearch — research into permanent horticultural crops;
- Crop & Food Research — research into annual crops (arable, vegetable and flower);
- Landcare Research — research into the environmental management of land resources; and
- NIWA (National Institute of Water and Atmospheric Research) — research into marine and fresh water systems, and climate.
Government expenditure under the Public Good Science Fund (PGSF) for 1995/96 was $257.5 million, of which $120 million was allocated to the agriculture and horticulture output classes. In addition, FRST also administers the Technology for Business Growth (TBG) scheme, which has the goals of:
- increasing the level and quality of research and development in industry;
- encouraging business growth and improved competitiveness through the use of science and technology; and
- encouraging closer cooperation between CRIs and industry.
Technology for Business Growth projects affecting agriculture normally involve a partnership between the business (which may be a group of farmers or growers) and a CRI to carry out the technological development or technology transfer (TBG 1994). Total funding of TBG in 1995/96 was $11.6 million.
While the CRI Act states that CRIs have a responsibility for "the transfer of knowledge", their overall thrust is as a commercial entity. Any intellectual property developed from PGSF funding is the property of the CRI. The expectation is that this intellectual property will be commercialised and marketed by the CRI in some manner — directly, in joint ventures, sold on a royalty basis, or marketed privately.
Contact for Enquiries
Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
Contact this person
