The Country 27/05/25: Professor Alan Renwick talk to Jamie Mackay

A new report from ASB and Lincoln University, launched at E Tipu today, shows that Kiwi farmers could unlock $10 billion in additional value for the economy by optimising land use by just 10% – and the transformation could happen within the next 5–7 years.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Hot off the press from the Itapoo Conference Day one
today in Palmi, North As a report commissioned by ASB
and Lincoln University saying that optimizing land use by just
ten percent could add ten billion and value to the
economy if it's done the right way in the next
five to seven years. Sounds wonderfully simple on paper, Professor

(00:24):
Alan Rennick, the author of it. But how does it work?

Speaker 2 (00:28):
Yes, you're right, it does sound simple on paper. But
the way we look at it is that we take
advantage of the opportunities that we have in the sector
and we get our settings right, both the financial regulatory
market and the support. There is no reason why we
can't boost productivity in the sector by ten percent and

(00:48):
also reduce our external cost and that could actually lead
to that ten billion growth that we're looking at.

Speaker 1 (00:55):
Well, it sounds a wee bit wishy washy to me,
give me some concrete ways to do this sell on.

Speaker 2 (01:01):
Yes, you're right, we need to think about the exact
ways that we can achieve it. And what we've shown
is through diversifying our landscape and our farms that we
can do this. So what do we mean by diversifying.
We have a huge opportunity in renewable energy production for
having distributed energy production across the country, and that can
be added value to many farms. We do have opportunities

(01:25):
in diversifying small areas of our sheep and beef farms
in that area, but also through food production, may be
horticultural expansion. So there's a range of ways that we
can do this. But the challenge is, as you say,
it's easy for us to say, oh, diversify, but we
recognize the challenges for farms doing this, and that's why

(01:48):
you need the support the market, etc. Because otherwise farmers
can spend ninety percent of their time trying to work
on ten percent of a divers diversification, which doesn't really
help their business overall.

Speaker 1 (02:01):
Is this just a cunning marketing ploy, a fluff piece
by ASP No No.

Speaker 2 (02:06):
I think ASB are very genuinely interested in the development
of the industry, and I think they're also interested in
developing their business. I think there's two aspects to it,
and all the way through this process, the passion that
they have for the sector has been has been very clear.

Speaker 1 (02:27):
Asb's response to lamb land optimization was inspired in part
by one of their customers high picked station. This is,
of course the Guild family. Now I put it to
you that while that's a wonderful case study, may not
be atypical of your average farm in the country. From
what I understand from the Guild family, they're well resourced,

(02:48):
they're well established, they're very entrepreneurial, they're very smart people.
Is the average average Joe Cocky going to be able
to replicate what they're doing.

Speaker 2 (03:00):
I fully understand what you're saying there, and that's not
really the point that we're trying to make in the report.
Were waiting everyone will be able to diversify. But what
we really are arguing very strongly is that we need
a system that gives viable options for all those farms
that wish to diversify, so that's more profitable alternatives, the

(03:21):
support to enable them to do it, the finance to
help them and ways to finance it, and then the
options that people can take, whatever their situation is, are
suited to optimizing their land. Yes, of course every farm
is different and not every farm can diversify. But if
we can create new markets, for example, for biodiversity, if

(03:42):
we could get this renewal of energy market going, we
give people options, and that's what we really need, options
to be able to enhance their profitability but also reduce
their environmental footprint.

Speaker 1 (03:53):
So what do you do? You put a solar farm
on a north facing slope and then you plant the
flat but see your land into horticulture.

Speaker 2 (04:00):
Well, or what we're doing at Lincoln Universities. You put
the solar farm on and you plant the horticulture under
the solar panels.

Speaker 1 (04:08):
That's even better.

Speaker 2 (04:09):
Do you do agri voltaic? So there's you know, what
we need are the ideas, We need the research and development,
and we need to give people opportunities to be able
to take put it into place.

Speaker 1 (04:19):
Do you think the banks other than I, spail back
this sort of initiative because it's all very well to
say I want to put a solar farm on the farm,
but you need some serious capital to do that.

Speaker 2 (04:30):
Yeah, no, exactly, And that's what the heart of the
report is about, if you get to it, is what
sort of finance models can we have that enable this
to happen? And so we've got to recognize we need
finance models that can deal with this high upfront cross
delayed returns. And if we're going into horticulture and stuff
very maybe potentially very risky to returns, and so that's

(04:52):
where we need the banks to play a role. But
we also need to think about foreign direct investment, philanthropy,
other approaches of getting money in that can deal with
this risky approach, and even insurance systems and how we
can underwrite it. That's what we're really trying to get
it is that the change we're talking about really challenges
our finance system and are they up for the challenge?

(05:14):
That's the question.

Speaker 1 (05:15):
Well, there you go. Optimizing out land use by just
ten percent could add ten billion in the next five
to seven years. Well, we live and hope our doctor, doctor, professor,
let me get it right. Alan Rennick from Lincoln University,
great to chat.

Speaker 2 (05:30):
Thanks very much. That's great