Date: 28 May 2009

Primary Growth Partnership – boost for primary sector innovation

Budget 2009 includes funding for the Primary Growth Partnership, a government-industry partnership that will invest in significant programmes of research and innovation to boost the economic growth and sustainability of New Zealand's primary and food sectors, including forestry.

To see the Budget release on this initiative, go to:

For further information, please call 04 894 4501 or email pgp@maf.govt.nz

Policy papers on the Primary Growth Partnership

Frequently Asked Questions

1. What is the Primary Growth Partnership (PGP)?

PGP is a government-industry partnership that will invest in significant programmes of research and innovation to boost the economic growth and sustainability of New Zealand's primary and food sectors, including forestry.

2. How is it funded?

Budget 2009 includes funding for PGP of $30 million for 2009/10; $40 million for 2010/11; $50 million for 2011/12; and $70 million per annum from 2012/13 to be appropriated to Vote: Agriculture and Forestry. This funding will be ongoing.

Investment programmes will be funded 50:50 by industry and government overall.

3. How will PGP work?

Work is underway to develop processes and systems for the partnership. By September, the PGP will be operational and guidelines for investors will be available. In broad terms, however, the process for allocating funding is:

  • An independent Investment Advisory Panel (IAP), appointed by the Minister of Agriculture, will call for expressions of interest (EoI) and assess proposals for investment programmes. There will be multiple EoI rounds in each financial year.
  • Successful EoIs will be developed into full business plans by a Programme Steering Group of co-investors (industry and government) for further consideration by the IAP.
  • The IAP will assess business plans and make recommendations to the Director-General of the Ministry of Agriculture and Forestry (MAF), who approves programmes for Government investment.
  • Once approved, Programme Steering Groups will arrange for contracts to be entered into through such as through existing investment mechanisms (eg the Foundation for Research, Science and Technology (FRST)). The Programme Steering Group will also be responsible for oversight of the programme.
  • The IAP will monitor and evaluate approved programmes on an ongoing basis and may recommend adjustments to investments.

4. Who is on the Investment Advisory Panel?

Bill Falconer has been appointed as Chair of the Investment Advisory Panel (IAP). Further appointments to the IAP are still to be finalised. The other appointments to the IAP will be announced in early August.

5. How can I participate and how do I get my ideas funded?

PGP is a partnership with matched investment. Programmes will be investor led and potential co-investors with similar interests will be responsible for developing expressions of interest and programmes for consideration by the IAP.

If you have ideas that you believe will achieve substantial economic growth and increased sustainability you should be talking to potential co-investors.

Work is underway to develop the systems and processes for the Partnership, and we are talking with sector leaders. By September, the PGP will be operational and guidelines for investors will be available.

6. What sort of projects will the partnership invest in?

Investments will focus on initiatives that deliver significant economic growth and sustainability across the primary sectors from producer to consumer. Investments can cover the whole of the value chain, including education, research and development, product development, commercialisation, market development and technology transfer.

7. Which industries are included within PGP?

The industries included within the scope of PGP are:

  • pastoral (including wool) and arable production;
  • horticulture;
  • seafood (including aquaculture);
  • forestry and wood products; and
  • food processing (including, for example, nutriceuticals).

8. When will organisations be able to apply for funding/present proposals?

Work is underway to develop the systems and processes for the Partnership. By September, the PGP will be operational and guidelines for investors will be available. There will be multiple EoI rounds in each financial year, so potential investors will have more than one opportunity to present an EoI over the course of a year.

9. How will funding be allocated?

Work is underway to develop the systems and processes for the Partnership, including a methodology for how the IAP will carry out its assessments and make recommendations. The IAP will be responsible for making recommendations on which programmes of investment should be funded. The Director-General of MAF approves investment of government funds.

To encourage investment to begin flowing, initial allocations of $2 million for each of the five sectors (pastoral (including wool) and arable production, horticulture, seafood (including aquaculture), forestry and wood products, and food processing) will be set aside within the PGP appropriation for each of the first two years. The remainder of the PGP appropriation (excluding funding set aside for the Centre for Agricultural Greenhouse Gas Research) will be fully contestable between all sectors and programmes.

The IAP recommends allocation of all funds between programmes, based on the quality of the proposals. Because an investment programme may span more than one sector (for example, pastoral and food) or there may be more than one programme per sector, the IAP will determine which programme(s) each sector allocation is used for.

After the first two years, the entire annual appropriation (excluding funding set aside for the Centre for Agricultural Greenhouse Gas Research) will be fully contestable.

10. How will each sector be given its $2 million?

The initial allocation of $2 million for each sector will not be "given" automatically to each sector; it is simply set aside within the PGP appropriation for use specifically by that sector, if an eligible programme of investment of sufficient quality is proposed.

The application and assessment processes will be the same and it will depend on the recommendation of the IAP whether to fund a programme from the initial allocation or from the wider PGP appropriation.

Investments made using the $2 million initial allocations must also be matched, overall, by private investment as with other investments through PGP.

11. What will the benefits be for NZ?

The primary sectors are critical to our economy both in terms of exports, the number of people they employ and the domestic businesses they support. Moreover, global demand for food is rising and it is likely that the food sectors will prove more resilient in the current global economic crisis than other sectors more reliant on discretionary consumer spending.

In a world where competition is intensifying, it is imperative that we enhance the economic and sustainable performance of the primary sectors. This needs to happen through greater productivity, increasing the number of farmers and growers achieving best practice, and increasing the value of the products and services that we sell internationally.

PGP will boost the productivity and sustainability of these sectors through ongoing investment in innovation, and deliver significant, long term economic growth and sustainability across the primary sectors from consumer to producer.

 
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