Investing in Agriculture in New Zealand: Opportunities and Challenges

MACROECONOMICS
2019

New Zealand
1. Brief Summary
An investment in any sector or country can be done provided it is aided with proper analysis
and evaluation. The report sheds light on the strength of the investment in the agriculture
domain of New Zealand. The obtained results from the report reflects that New Zealand has
one of the most efficient and competitive entrepreneurial environment across the globe at
present. As per the results it can be commented that agriculture can be defined as the largest
sector of the economy that is traded. It contributes more than two-thirds of the exported
goods. However, New Zealand faces various economic challenges like corporate debt, low
skilled workers, dependence on foreign investment, low Research and Development, high
household, the reliance of Chinese demands, shortage of housing, and so on. The country’s
economy also faces challenges in international commodity prices specifically in meat and
dairy products. There is a shortage in the workers in the country as the government has
restricted access to unskilled workers and student visas to even out housing process. The
country has allocated enormous public funds towards the reconstruction of better roads and
railways and the development of KiwiBuild Programme. However, new technologies are
continuously updated so that the food quality is of high quality. NZ is mainly dependent on
agricultural and exports of horticulture products. In the year 2017, NZ imported food
products of more than$68 million signifying a strong trend.
The report recommends investing in New Zealand at this current point of time because the
agriculture sector has ensured a glorious run and good opportunity to ride on this sector.
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New Zealand
2. Introduction
The report aims to provide a strong emphasis on the country New Zealand and whether the
agriculture industry is Suitable for providing potential returns. The economic variables that
are used to reach the conclusion comprises of the business environment analysis, economic
growth , unemployment, average wage rate, human capital, inflation and real interest rate.
The research is undertaken through an in-depth analysis of data from relevant sources and
each of the factors is briefly stated in the report. New Zealand’s economic growth is also on
account of the country’s close connections with Australia and Asia (Trading economics,
2018). With the due passage of time, the consumer power is enhancing to a great extent and
hence, there is a strong need for quality food. In the past 20 years, it is viewed that consumers
have taken active participation in the production of food and hence, the challenge for
agriculture remains to produce more food. (Export.gov, 2018).
The research that is undertaken will help to endorse a reply whether it is feasible to
investment in New Zealand.
3. Analysis of Economic situation in New Zealand
3.1. General Business Environment
This section will shed light on the business environment that exists in New Zealand,
explaining the procedure to start a new business.
3.1.1. Starting a business
There are various procedures that are needed to be fulfilled in order to start a legal operating
business. Pre-registration verification, reservation, and notarization are needed to be
performed.
• Registration of the organization in the largest business city of the economy should be
done.
• Post registration like security registration and company seal should be made.
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New Zealand
• Approvals from a spouse in order to start the business and register the company should be
provided.
• National identification proof and other gender-specific documents should be provided
while the time of companies registration.
Every procedure requires a time period in order to gather the information that is required for
setting up a business. Generally, every procedure starts on a separate day and if they are
completed online, they are recorded as a half day. The procedures are considered to be
completed only after the final documents are received.
Figure 1 Ease of doing business in New Zealand
(Doing Business, 2019)
The cost that is required to complete the procedure should be only e provided if their official
in nature. No expense should be incurred by the organization if the fees or the service haven't
been mentioned by the law commonly used in practice.
The capital of the organization and the total percentage of the per capita income are decided
on the basis on the funds deposited in the bank by the third party before registration or up to
the period of 3 months after incorporation.
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