Covid -19: An Opportunity for the New Zealand economy

The Covid-19 pandemic is having and will continue to have a huge impact on the economic wellness of all countries. While effects are far-reaching and multiple industries will be impacted, two of New Zealand’s largest sources of employment and export earnings, have been hard hit by this clever virus, resulting in a sudden increase in financial stress and unemployment. The two industries being tourism and forestry.

With border restrictions and consequently less overseas visitors likely to continue for the foreseeable future, and in the global economic slowdown causing reduced demand for forestry products, the hit on these sectors of our economy from Covid-19 will be harsh. This will be particularly so for people living in New Zealand’s rural regions and small towns, where businesses based around tourism and forestry are often the foundation of the local economy. A re-evaluation of New Zealand’s competitive advantages and emerging opportunities to provide alternative sources of employment and exports in the ‘post Covid-19 world’, is therefore a priority for both the New Zealand government, and many businesses.

 

New Zealand’s Strategic Advantages:

The diversity and scale of our natural and rural landscapes and environment, is a key strength. This is not only appealing to tourists, but provides an ideal environment to grow a wide range of different plant types in different geographical regions. We already produce more food than is required for the local population, and export many products derived from plants and trees. Exports of wine, kiwifruit, avocados, apples, berries and other fruits, nuts and cereals, have all risen substantially over the past five years. The future of food will be more based upon plants and less on animal products, than it is now.

Another strategic advantage New Zealand has, is being a relatively small country with a low population density, and with a track record of adapting quickly to global economic changes and shifting market trends. This we have had to do several times in our past, each with good long term outcomes. Examples include the assignment of thousands of unemployed men to tree planting and further establishing a forestry industry during the Great Depression in the 1930’s, the shift to new markets after being too dependent on Britain for exports when that country joined the EU in 1973, and the early decisions by Air New Zealand to develop new and emerging markets and invest into more fuel-efficient planes, at a time when most airlines were becoming increasingly under stress early this century.

With Covid-19 being the latest global stressor to our economy, as well as future impacts of climate change and increasingly frequent droughts and floods, a fresh and forward thinking approach to rejuvenating regional and rural economies, is called for. In fact the non-native based forestry industry and elements of our tourism industry had already grown to the point of being unsustainable and having increasingly negative environmental and sociological impacts for some time. Some re-setting of their scale and our dependency on them was needed even before Covid-19. Nature has been protesting about the mounting negative impacts from carbon thirsty human activities for some time now, and there is a need to moderate our excessively animal based farming model for the wellness of both the planet and future generations.

 

Phytomedicines: The Big Opportunity

Many of our existing food and beverage products have health enhancing properties, but are just the tip of the iceberg in our potential to grow and add value to, a much wider range of plant-derived herbal or phyto (‘plant’) medicines.

Global demand for herbal medicines and their raw materials has been rising for many years due to a multitude of powerful market drivers, and Covid-19 has spurred this even more. This includes demand for products aimed at supporting immunity and stress, but also a wide range of other health and wellness applications.

Aging populations, increasing costs of new drugs and hospital care, and the associated budgetary constraints by government health agencies, are also catalysing increased interest in natural health products. Finally, the increasing evidence for the effectiveness of various phytomedicine interventions for a wide range of health conditions, supported by traditional use as well as modern science.

Covid-19 has dealt us a sudden reminder that drugs don’t always provide all the answers, and the void of antiviral drugs or vaccines to prevent or treat this virus, should be a wakeup call to us all. And then there’s that other closely related and worsening nightmare of antibiotic resistance, which already contributes to more than 700,000 deaths each year(1, 2), telling us again, that fresh approaches are called for in managing and preventing infectious diseases in humans.

New Zealand is currently one of the best placed countries in the world to build a rich natural health product industry that could make a much bigger contribution to our future exports and GDP. Apart from our natural resources, fertile soils and hard-working farmers, we have an enviable track record of research and development in biological and agricultural sciences, and pharmaceutical company development. Many intelligent people who work within universities, crown research institutes, private laboratories and as R&D providers have contributed to building and supporting a range of companies making products from plants that are competitive and premium quality, and in demand from overseas markets. As with other crops such as avocados, fruit and nuts, returns per hectare from growing medicinal plants are relatively high, although initial establishment costs such as growing systems and processing facilities can be significant, and benefit from economies of scale.

Growing ginseng in New Zealand pine forests has been shown to produce a premium quality (high ginsenoside-containing) and potentially very lucrative crop(3, 4). Rising demand for medicinal mushrooms through research supporting their usefulness in conditions such as cancer, immune conditions, viruses and lung inflammation(5), suggests research into some of the diverse introduced and native fungal species we see growing in our native and planted forests, would also be worthwhile.

While some early commercial operations into growing crops such as ginseng, green tea, ginkgo, saffron and mānuka as sources of medicines has revealed many challenges, others focussed on these and other medicinal plant species, have succeeded, and demand is now often outstripping supply. Further opportunities exist with cultivating high quality and sustainably grown phytomedicines such as saffron, rhodiola, false unicorn root and golden seal, all of which demand high prices due to being endangered in the wild yet highly sought after for their medicinal properties.

 

A Call to Action:

Covid-19 has jolted the world, and caused a sudden shift in the way we used to do things, and how the future will look. Like other countries, New Zealand needs to respond to this as a matter of some urgency, by identifying and pursuing new opportunities that have become even more apparent since this virus jumped into humans.

Businesses themselves will of course continue to develop innovative products and pursue emerging export market opportunities. However, support from government to enable more research and the development of increased local raw material production would both help facilitate increased exports by this fast growing and healthy industry. This would also help regenerate rural economies, and provide new sources of employment to those severely impacted by Covid-19.

A working group of industry, science, Māori, farming and government representatives should be formed to further explore options, and some of the regional development and other government funds that are being allocated to support business development and employment initiatives during the Covid-19 pandemic, could perhaps be allocated to this. An action plan to support new initiatives to help New Zealand leverage some of these large opportunities, could include the following:

  1. Investment in research into phytomedicines as well as that involving drugs, for Covid-19 and as antibiotic alternatives or adjuncts.
  2. A stocktake and comprehensive survey of various weeds, native plants and fungi that could be propagated and harvested as a secondary income earner for the forestry industry.
  3. Research into medicinal plants including field trials on selected species, to learn more about their agronomy, optimal growing conditions and geographical locations, and quality plus commercialisation considerations.
  4. Research into the phytochemistry, pharmacology and agronomy of New Zealand native plants and fungi, and an integrated approach to enable these being able to make a greater contribution to the future health care of both local communities, as well as wellness needs of our future generations and tamariki.
  5. Support for private sector businesses engaged in researching and establishing export markets for innovative, value added natural health products made from locally grown raw materials.
  6. Funding for clinical trials into phytomedicines that have the potential to be both grown in New Zealand, and make a valuable pharmaco-economic contribution to future health care treatments.

 

Finally, in writing this I’ve been taken back to remembering one of the children’s books I used to read to my son a few years ago,Dinosaurs (and all that rubbish)” by Michael Foreman. The book describes how the dinosaurs have taken over the Earth, after it not being treated kindly by humans, and one piece of it reads:

“As the rubbish was cleared

Green shoots appeared,

Bursting through cracks

And climbing over old forgotten walls.

Telegraph poles and iron pylons

Vanished beneath trailing blossoms,

And a fresh new forest

Of flowers and trees spread

Like a smile around the world”.

 

 

Phil Rasmussen

28 April 2020

 

 

withania seedlings 2016

 

References:

  1. https://www.fairr.org/article/resisting-resistance-investors-take-action-to-manage-risk-of-antibiotic-overuse-in-farming/
  2. Gerberding JL, First Opinion, 23 March, 2020. https://www.statnews.com/category/first-opinion/
  3. Chen W et al, Biomolecules 2020; 10(3):372.
  4. https://www.riddet.ac.nz/supercharged-ginseng-grown-on-new-zealands-fertile-volcanic-slopes/
  5. Chaturvedi VK et al, 3 Biotech. 2018 Aug; 8(8): 334.

 

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