New Zealand's Primary Sector - Changing State
Even in the world’s rapidly changing global environment the primary industries remain the most extensive, natural resource based, economic, international activity. This is particularly true of New Zealand where given our small size, physically, economically and in population, the only sector approaching a global scale is the primary sector, which contributes about 18 percent of New Zealand’s GDP (Figure 1). The primary sector is the only sector in New Zealand with world class economies of scale and scope, global market reach and world leading technological capabilities. New Zealand is the world’s largest dairy and sheep exporter, has the world’s most competitive kiwifruit industry and is a major player in other areas such as apples and venison (Figure 2).
Keeping pace with international market demand by driving productivity gains requires our primary industries to be scientifically sophisticated with rapid advances in research and innovation, particularly in biological sciences. The primary sector is made up of some of our largest companies, who are major investors in private sector research and development.
In addition to the direct contribution the primary sector makes to our economy there is a huge flow-on into manufacturing, processing, education, technology, communications, and transport businesses. Our primary industries, food and tourism have mutually beneficial relationships. There are many niche businesses based on our food, hospitality and wine industries, and our country’s diverse landscape, which attract domestic and international tourists.
The long term prospects for most of the primary industries are positive because of ongoing innovation and productivity gains, increased globalisation, enhanced market access, and increased international demand due to rising per capita income and changes in diet to western foods. Underpinning these factors is the sustainable development of New Zealand’s natural resources to ensure the primary sector continues to prosper.
Increasingly in freer markets consumer perception of the quality of our natural environment is also driving the demand for products from the primary industries. In particular, customers (and their governments) are demanding credible assurance not only in respect of food safety and biosecurity status, but also that the production of goods is environmentally sustainable. Trade agreements increasingly include elements of environmental sustainability and environmental co-operation.
The increased number of goods and people crossing the border in a progressively global and freer market will apply more pressure to our borders particularly in security, biosecurity and food safety.
So while the primary sector will continue to underpin our economy the nature of the challenges facing the sector, related industries and regulators will continue to evolve, with much of that evolution centred on sustainable development.
Figure 1: GDP Contribution (December 2005 Quarter – NZ $ Million)
| Constant 1995/96 prices | 1995 | 2005 |
|---|---|---|
| Agriculture | 4556 | 5606 |
| Forestry and logging | 1190 | 1430 |
| Food and beverage manufacturing | 4688 | 5802 |
| Wood and paper product manufacturing | 1990 | 2535 |
| Total GDP | 89644 | 123796 |
Note: in current prices, it is estimated that agriculture, horticulture and forestry, including associated processing and services contribute a total of 18 percent to GDP. Source: statistics New Zealand.
Figure 2: Total New Zealand Exports
Source: Statistics New Zealand
Contact for Enquiries
Strategy and Performance Group
Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: +64 4 894 0100
Fax: +64 4 894 0738
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