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COVID-19

Published: 1st May 2020

Author: Neil Dent, Gifford Devine

Published in: Rural eSpeaking

Agriculture continues to be the mainstay of our economy

The COVID-19 virus that is sweeping the world will impact upon us all and pretty much everybody in the world one way or another. The repercussions will differ depending on where you live, what age you are and what you do, but it will be there nonetheless.

The economic impact of the virus is uncertain but it will be significant. In New Zealand, the immediate effect was on the tourism, hospitality and retail sectors.

Challenges ahead for agriculture

Sectors such as agriculture, which are deemed ‘essential’, could carry on even during Alert Level 4 but will continue to experience significant difficulties, including:

• Disrupted supply chains
• Disrupted markets, both domestic and international
• The need to change packing and processing set ups to ensure social distancing, etc and the costs associated with that, and both direct costs and indirect costs associated with the slowdown of processing, and
• Markets either disappearing or shrinking.

The country has just moved to Alert Level 3 and (hopefully) two weeks thereafter will move to Level 2. Some of the immediate difficulties for the agricultural sector will be alleviated as the alert levels lower, but the economy (both local and international) will be disrupted for some time.

Of particular concern is the hospitality sector which is obviously a large user of meat, vegetables and fruit that our agricultural producers supply; it will take some time for this sector to recover.

Tourism levels will take a very long time to be restored and, as a result, the market for feeding and accommodating those tourists will be depressed for some time to come.

Agriculture is the linchpin of our economy

What is evident from this crisis is the value that the agriculture sector holds to the New Zealand economy. Prior to COVID-19, the agriculture sector seemed to be suffering from a surfeit of bad press and, in particular, was seen as the main villain in environmental matters; this seems to have been largely forgotten at the moment.

For example, ‘Our Freshwater 2020’ Report, that was released by the Ministry for the Environment and Statistics New Zealand in early April, barely raised comment in the media. Imagine what might have been if we weren’t battling COVID-19?

What the current situation does show us is that in order for us to remain economically viable as a nation, we need many strings to our bow. Until February, tourism was New Zealand’s largest industry in terms of foreign exchange earnings. It now contributes nothing to the economy and it will take years to recover. What that recovery will look like no-one is really sure.

Agriculture itself has suffered blows over the years, including PSA, Mycoplasma bovis and other viruses or diseases, and it continues to face threats, particularly in the biosecurity area. Agriculture is, however, a diverse sector and its strength is that if one area suffers a setback or is down for a period other areas continue to do well.

One would hope that some of the bad press that has been following the sector in recent years will now show a bit more balance and acknowledge the contribution that agriculture makes to New Zealand’s economy.

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  • Nelson
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Malley & Co

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Gillespie Young Watson

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No firms in West Coast

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