12 | product. This, Ben considers to be unacceptable and unsustainable to the deer industry in a time of increasing economic and environmental pressure. In his opinion ‘we can longer afford the status quo’. ‘The Green and Black of It’ sets out to suggest a number of ways forward.“We need to fundamentally change the way Deer products, and in particular velvet, are taken to market. I would like to see Deer Industry NZ take a leadership role in pulling together a strategy, with input from the NZ deer Farmers Assn and the Government, that will be effective in creating new value chains that match value creation with economic return. Moving from conventional supply chains, that State of the NZ deer industry in focus Puketotara Farm has 300 stags and beef cattle in Ongaonga. Sue Russell • to page 13 RURAL PEOPLE » Ben Anderson - Puketotara Farm Ben Anderson owns Puketotara Farm, on which he runs 300 velvetting stags and beef cattle at Ongaonga, some 20km’s west of Waipawa and Waipukurau in central Hawke’s Bay. He has also recently purchased a 500 cow dairy unit near Eketahuna and has diversified into forestry, having planted 100ha of pine between the home farm and a dedicated forestry block. Ben holds strong ideas about the health and situation of the deer sector as it is currently structured and has put considerable thought and research into where the industry needs to adapt and change in order to create long-term sustainable value for its farmers. He’s had the opportunity to really explore the context of the deer industry as a recipient last year of a Nuffield Scholarship. Scholarships, from this international organisation, are awarded to those working in the food and fibre sectors who are keen to challenge, share, explore and bring their ideas to life. “Receiving the scholarship offered me the opportunity to really explore the current situation within the NZ deer industry, , to better understand the shape of the challenges we faced and to see where the opportunities might exist,” Ben says. Nuffield Scholars are selected from a criteria which places a focus very much on the future. Recipients are those who demonstrate a tenacity to challenge and test their own thinking and above all, are not afraid to do things differently and test historical boundaries and norms, with a view that their research will enable strategic growth and secure the industry better for the future. “Usually the programme involves first travelling overseas, learning more about what is happening globally across a range of agricultural sectors, but because this was during Covid, I ended up spending last year drilling down into what was going on within the NZ environment and completing my research paper from that perspective. Soon I will be heading away to Europe and the U.S.A. to look at agriculture more generally, but with a real focus on seeing what lessons and observations can be applied back home. Ben’s research on the New Zealand Deer sector is espoused in his Paper, ‘The Green and the Black of It: Economic and Environmental Sustainability in the NZ Deer Industry and the Case for Change’. His research was driven by a desire to better understand why New Zealand deer farmers operated within a production structure that appeared to place the maximum risk on them, while delivering disproportionately small farm gate returns. “I wanted to understand how it has come about that NZ deer farmers received poor returns when compared with the level of risk and the value of the end-product.” Ben says the whole purpose of his study was to identify why and where change was needed to bring about sustainable practice and profitability to the industry here. This included looking closely at existing supply chains and evaluating these in terms of being fit for purpose in a rapidly changing world. Ben approached his research in a number of ways; reviewing existing commentary, speaking with industry leaders, academics, public servants and business owners. He discovered that NZ deer farmers, like the wider dry-stock sector are not profitable when considered against average Returns on Capital Employed in this country. Deer farmers here, on average returned 3.4% on their capital, compared with 6.5% on the NZ share market. “Factor in inflation and the return is virtually zero.” What this means is that NZ deer farmers, along with the rest of the drystock sector, have very little financial headroom to improve their environmental performance in any meaningful way, such as by reducing stock numbers, and still be a finacially viable. It also means that exisiting deer farmers will increasingly look to more profitable forms of land use such as forestry, further contracting what is already a small industry. Pine trees have never been our problem. Our lack of profitability is. “We also have far-reaching issues such as the consequences of climate change and competition against alternative proteins to increasingly contend with. These factors alone create significant risk to an industry which is relatively fragmented and is unable to exercise any real market power. Unlike the dairy sector where the majority of farmers are shareholders of an organisation established to add value, create meaningful gain through the supply chain, and champion milk by adding value, paid back to its member suppliers, the deer sector isn’t structured to work that way. Ben describes two challenges ahead: Firstly, shifting the sector to create a strategy of active risk management and secondly, develop and implement ways where value can be both captured and created. “The question is what is the most appropriate way for the sector to firstly ensure its survival, and secondly become an economically and environmentally sustainable form of occupation for future generations, noting that there is no one solution. Unintelligent selling of velvet, as Ben puts it, is an example of an inertia and inability to focus and implement needed changes to bring about meaningful gain.“Compare our situation to that of the horticulture sector and the huge part Zespri has played in delivering value-add results to its suppliers and to Fonterra, who deliver better farmer returns because of how they are organised.” NZ’s own Spring Sheep Milk also provides a great example to the deer industry. It uses a similar form of commodity, but with value added, a strong brand created and sold via multiple distribution models to multiple markets. As a result, Spring Sheep farmers enjoy around $4000 EFS, compared to the deer industries average of $300-$500 EFS. The Deer industries conventional position, selling raw undifferentiated commodity products to a small pool of coordinated foreign buyers , creates the opportunity for others to realise the true potential of the product. This approach results in NZ’s velvet producers receiving as little as 3% of the end value of the “We need to fundamentally change the way Deer products, and in particular velvet, are taken to market. I would like to see Deer Industry NZ take a leadership role in pulling together a strategy, with input from the NZ deer Farmers Assn and the Government.” andersonreisima@gmail.com Ben 0278192792 / Wayne 0274441270 338 Te Awa Road, RD4, Waipukurau 4284
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