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ASB Bank MAGS Farm development Contributing to the future of New Zealand agriculture

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Contents

01 Executive summary 04

02 Introduction and the current farm 08

03 The proposed development plan 14

04 Governance and stakeholder engagement 22

05 Funding and next steps 26

01Executive summary

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Executive summary

Agriculture remains critical to New Zealand’s prosperity.

To ensure New Zealand's agriculture industry remains sustainably viable, it must attract and excite our youth. They need to see agriculture as important to the future of their nation, their community and most importantly, to their own personal future.

Many schools around New Zealand are launching farm projects to engage their students, but the ASB Bank Mount Albert Grammar School Farm (ASB Bank MAGS Farm) is unique. It sits in the middle of New Zealand’s largest city, and has the potential to embed our most productive industry into the centre of this huge urban community.

ASB is committed to the success of this initiative. Our goal is to create an environment where young people learn about the agricultural sector, become excited at the prospects it offers them, and prepare for a rewarding career in the industry. The ASB Bank MAGS Farm’s ‘real on-farm experience’ has the potential to engage entire communities, and help lift the urban understanding of the value that farming brings to our economic and environmental sustainability.

In the fi rst phase of the development, we expect three key outcomes:

• Preparing school leavers (including those going on to tertiary study) with relevant skills in science, business, agriculture and horticulture (‘the cultures’).

• Improving the connection between the agricultural sector and urban NZ in regards to the role the industry plays in our economy, the use of technology and the career opportunities it presents to young people.

• Enhancing the perception of the wider community that the primary industry is a steward of the environment and is an important part of New Zealand’s future.

The key component of this fi rst phase is to upgrade the ASB Bank MAGS Farm and align it with current best practice in environment and animal welfare. This includes improving its infrastructure, and constructing the Experience Centre. We will also immediately introduce management, governance structures and a charter to ensure a consistent long term approach to any future developments, so that they deliver benefi t to MAGS, the industry and, most importantly, the wider New Zealand community.

Development of the Experience Centre programmes and the school curriculum enhancements are also key deliverables of phase one.

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02Introduction and the current farm

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Introduction

The ASB Bank MAGS Farm was originally established in 1932, requiring the passing of special legislation to allow the Auckland Savings Bank to buy the land from the Kerr-Taylor sisters and then lease it back to the school. The future of the 8.1 hectare model farm alongside MAGS has been secured with a new long term lease agreement that concluded in 2013 between ASB Bank and the Mount Albert Grammar School Board of Trustees.

Under the terms of the agreement, ASB will continue to lease the land to the school for an effective 99 year term with a nominal annual rent of one dollar.

Agriculture accounts for 70% of New Zealand’s export income and contributes 12% to GDP. The government has set an ambitious industry goal of doubling export earnings by 2025. To achieve this, Ministry for Primary Industries has estimated the industry will need to fi ll an additional 50,000 roles in agriculture. This is in addition to the replacement of people leaving the industry or retiring. MPI notes that half of these new roles will require a tertiary education qualifi cation.

Creating a sustainable primary industry is paramount for New Zealand’s future. A truly sustainable system balances the needs of the community, the environment and profi tability. There is a growing perception amongst urban New Zealanders that the industry in general is failing in its duty to protect the environment and is consequently not acting in a manner that will bring long term benefi t to all New Zealanders.

The ASB Bank MAGS Farm presents a unique opportunity to re-shape those perceptions. It can demonstrate the ways in which new technology is being used in production systems, and highlight new initiatives that ensure the sustainable management of the environment and waterways.

The agricultural sector must take full advantage of the opportunities available to it to create value for New Zealand and the industry’s stakeholders. There is a need for a collaborative focus to ensure we secure a thriving agricultural sector for New Zealand’s future.

The changing demographics of New Zealand’s population is having an impact

The changing demographics of New Zealand’s urban areas through immigration and urbanisation mean the majority of urban dwellers no longer have a direct connection to agriculture through family. As a result, people’s understanding of food origins and the contribution that agriculture makes to the economy has diminished.

As the urban and rural divide continues to increase, the opportunities for our young people to be inspired by a career in agriculture is diminishing. It is growing increasingly hard to demonstrate to youth that a career in the industry has unlimited potential to be on the edge of innovation, medicine, marketing or business management, to name a few.

The ASB Bank MAGS Farm, incorporating the Experience Centre, will provide an effective and community-conscious learning environment that integrates the agricultural sector with the active learning of students from both MAGS and the wider Auckland community.

Collaboration has already commenced

In August 2013, a workshop was convened at the farm led by MAGS, ASB and KPMG and a number of industry representatives. Together, the group discussed how to leverage the facility for the wider benefi t of the agricultural sector, given the industry’s strategic challenges.

From this session, ASB, KPMG, Fonterra Co-operative Group, Landcorp Farming, Te Tumu Paeroa, Plant and Food Research and NZX Agri provided funding to progress to a formal business case.

These organisations form the Foundation Partners for the ASB Bank MAGS Farm, and were all consulted in the preparation of the business case, together with the Ministry for Primary Industries, Lincoln University and Dairy NZ. Other organisations have indicated a desire to support the project once the project plan is developed.

The industry needs an additional

50,000 workers to double export

earnings by 2025.

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The current farm

The ASB Bank MAGS Farm has 8.1 hectares of well-maintained land and infrastructure. However, due to its age the structures have a 1950’s feel, including a 2 bale walk-through milking area. It is no longer representative of the industry and does not provide an effective teaching facility.

There is a mix of stock classes on the property but the Foundation Partners unanimously agree that the proposal should be to focus on an agricultural educational programme based on ‘commercial’ farming operations of dairy cows, beef cattle and sheep using the latest technology and demonstrating truly sustainable farming practices. The partners also believe that should demonstrate key horticultural activities.

Each year, about 160 students participate in the MAGS Agricultural and Horticultural program. These students start studying the ‘cultures’ in Year 9, and some progress to take NCEA unit and achievement standards in either Agriculture or Horticulture. The programme attracts both male and female students, including those that have an aspiration to progress to university study in Agricultural Science and other relevant degrees.

The farm usually operates with three full time staff: two direct teachers (one in agricultural and one in horticulture) and a farm manager. The farm manager also delivers practical tuition.

The teaching staff also provide occasional tours of the farm to other schools.

Ambition:

To continue to provide an interactive learning environment for the

agricultural and horticultural programmes, ready to be

integrated in the wider school curriculum.

160 students currently participate in the MAGS Agricultural and Horticultural program.

03The proposed development plan

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On-farm processes

Feed budgeting

• Plate metering (graphing), calculating feed available vs requirements

Fencing and water

• Practically implementing feed requirements with break-feeding and monitoring water availability

Milking

• How to put cups on, health and safety in the milking shed.

Shearing

• Wool analysis and the reasons why

The proposed development plan

The ambition for the ASB Bank MAGS Farm is to create a world-class teaching facility and experience centre. It will help educate young people and their communities about the agricultural sector, the opportunities it holds for them, and the value it creates for our economic and environmental sustainability.

Located in the heart of Auckland, the ASB Bank MAGS Farm will demonstrate the innovation, science and environmental best practices used on farms across New Zealand. It will also be the driver for substantially increasing the number of MAGS students studying agriculture from 160.

St Pauls Collegiate School in Hamilton is developing an open access curriculum in Agricultural Science and Business which MAGS and other schools around the country will implement as part of the curriculum certifi ed to NCEA achievement standards by NZQA. Its purpose is to better prepare those students who are interested in pursuing a tertiary qualifi cation in agriculture.

It is proposed that the ASB Bank MAGS Farm will partner with a University to deliver long term advantages in accessing funding, networks and advanced curriculum.

Improvements to infrastructure, livestock management and land use

Overall, the development of the ASB Bank MAGS Farm will see a reduction in types of livestock to focus on ‘commercial’ farming operations of dairy cows, beef cattle and sheep. The land use will be reallocated and more effi ciently utilised. And machinery and infrastructure will be brought into line with what is modern day best practise across all facets of a farming operation. Below graphs show allocation of stock units and proposed land use:

Focus on ‘commercial’

farming operations.

Horticulture

Dairy

Sheep and Beef

Building, roading,housing

Proposed land use (8.1 hectares)

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3.32.8

Milking cows

Sheep

Beef cattle

Stock Classes (stock units)

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Agriculture

On-farm activities featured in the proposed practical agricultural programme

Animal health and processes

Wider impacts

Reproduction

• Genetic analysis• Artifi cial Breeding

Sustainability

Water analysis, effl uent storage/usage

Feed requirements

• Reinforces importance of animal health and wellbeing

• Incorporating: condition scoring/weighing and mineral requirements

Health & safety

On-farm machinery, work-safe, helmets

Common ailments

• Raising awareness of: mastitis, milk fever, grass staggers

• Footrot, internal and external parasites, TB.

Business

Basic budgeting, cash fl ows

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Horticulture developments

The Horticulture area will be expanded to 1 hectare. Plant and Food will provide a plan to best utilise the facilities across the school year to give students the most learning benefi t.

Half the horticulture area (0.5 hectares) will be placed into grapes. The grape crop works in well with the school year in regards to allowing students to view maturing fruit and harvest. The grapes will be harvested and taken off farm to an Auckland winery for processing. This will demonstrate to the students the need to think about post-harvest use of agricultural production and potentially enable technology being developed for a leading edge research initiative (the Primary Growth Partnership for Lifestyle Wines) to be deployed on the ASB Bank MAGS Farm.

Pip fruit and citrus trees will be used too, allowing for exposure to diverse plant varieties. Fast growing crop rotation will also be part of the plan to demonstrate germination, growth and harvesting. This is important for the students to experience as they can learn the value of soil quality as well as the plant growth cycle.

Any effl uent discharge or animal faeces would be utilised by the horticulture area to have a greater use of biological fertilisation, reduce waste, demonstrate synergies of land use, and ensure a sustainable use of all resources on the property.

Wider MAGS benefi ts beyond agricultureUtilising the farm and its resources in all parts of the MAGS curriculum will have incremental benefi ts for the school. All other subjects at the school would benefi t from the resources available on the farm, for example, maths and science could collect and analyse the data from plant growth right through to textile classes understanding the value of wool microns in creating garments.

During stakeholder discussions a common theme raised was the need to have the entire school involved and using the facilities not just in Agri specifi c classes but in all parts of the curriculum to build the understanding of the agricultural sector. Te Tumu Paeroa discussed a desire for students to understand the place for Maori and their land in the agricultural sector and the value this can create for the New Zealand economy in a manner that is integrated into the wider school curriculum.

The Experience Centre: Our ambitions are world-classThe Experience Centre is intended to provide a ‘laboratory’ learning environment including a fully equipped classroom facility, an exhibition space, theatrette and viewing area as well as offi ces and usual facilities. The centre will be developed in a fl exible manner to enable it to be used for corporate and industry events when not being utilised by schools. We envisage the Experience Centre will become an agricultural sector hub in Auckland.

Technology and interactive learning will be a focus of the Experience Centre whilst providing safe viewing areas when cows are being milked and sheep are being sheared. Students and visitors will also have the option of hands on experiences.

The Experience Centre will be open to all schools and not specifi c to MAGS students therefore it is proposed that educators will be employed to support the ‘experience programme’ separate from the MAGS education programme teachers. The school will however, have priority access to the Experience Centre classroom and lab facilities. MAGS will be able to lock in its requirements for the teaching space each year before space is offered to other Auckland secondary schools.

It is proposed that riparian planting down the larger surface waterways be done using Manuka Trees. Other than having the environmental benefi ts of riparian planting this will also allow for the production of Manuka honey for which there are currently hives on the property. The production of honey provides wider educational opportunities such as business, marketing, food safety, health and safety, science, medicinal benefi ts analysis etc.

Ambition: To host at least 20,000 students at Year 3 to 6 level from across

Auckland at the Experience Centre each year.

On-farm activities featured in the proposed practical horticultural programme

Growing processes

Pollination

Pruning/plant preparation

Bees versus synthetic, genetics

Quality and practice which leads to strong production

Production

Harvest and processing

Sustainability

Water analysis, fertilisers use

Business

Basic budgeting, cash fl ows

Health & safety

Financial literacy

Food safety

Machinery, work-safe, safety equipment

Bees

Wider impacts

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The Experience Centre must be capable of accommodating age groups from preschool up to adult visitors. An education team will be consulted to design the facility to ensure it is future proofed and can maximise the learning that will take place. This team will consider the variety of learning styles to inspire talented young people to consider career opportunities in the agricultural sector, however naturally it will most likely appeal to kinetic and visual learners.

The cost to build the Experience Centre is estimated to be around $3 million (approx. $3000 per m2) based on conversations with construction companies. It would be proposed to tender a design/ build contract to a well-recognised construction company that specialises in educational facilities. It has been indicated that the build period would be 12 to 18 months (post consent approval) to fully complete such a facility.

The cost to build the Experience

Centre is estimated to be around $3

million.

A milk meter will let students

see milk production in

real time.

High-tech agricultural sectorThe agricultural sector may not seem as fl ashy and as lucrative as the developing tech companies of this world, but the reality can be quite different. To attract young New Zealanders to consider agriculture as a career opportunity we must adapt our promotion of the industry to appeal to a generation where everything happens instantly, devices are common place and connectivity is a given.

Therefore, technology will be a signifi cant component in the development of effective learning and experience facilities across the ASB Bank MAGS Farm. The technology must be leading edge, yet user friendly. It must provide meaningful and utilisable data in both agricultural and wider curriculum at MAGS.

Sensors and recorders will be embedded across the wider farm area, but specifi cally in the horticultural area and milking shed. Smart boards, tablets for data collection and other equipment will be found in classrooms and will complement the technology used through the farm. The whole facility can be networked to let students observe real farm activities live in the classroom from partner farms (for example, it may be possible to watch milking on a Landcorp farm as well as seeing the data being collected at the same time) so students can understand and simulate the decisions that farm managers make on a daily basis to maximise their operational performance.

A herringbone milking shed system and a milk meter are examples of the specifi c agricultural technology that could be demonstrated on the farm. Students will witness the real operation of a current-day milking system and begin to develop an understanding of hygiene and animal health as part of an effectively-operated milking system. The milk meter will let students see milk production in real time, and let them develop a data source for the dairy cows including contaminated milk monitoring. Ongoing technology upgrades will be required.

The management and governance committee may develop interactive reporting processes on the information provided by the technology as part of the farm day-to-day operations. Technology used in an integrated and straight-forward way will provide an unparalleled immersion into the agricultural and horticultural sector.

Plant and Food Research (‘Plant and Food’) would advise on integration of appropriate technology on-site in the horticultural area as well as how to utilise their existing scientifi c facilities to effectively complement the facilities at MAGS, but focusing more on food safety and biosecurity.

Some of the ideas mentioned by partner organisations during consultation included:

• Weighing equipment

• Plate meter

• Production software such as farm IQ – Use of farming production software to provide meaningful information outputs

• Financial management practice, using ASB Bank, Figured On Farm and Xero integration

Key

Main drain

Proposed underground drain from springs

Riparian planting

Horticulture area

Farm managers house

Springs

Experience Centre (incl. classrooms and viewing platform)

Shearing area

Milking area

Effl uent catchment (for use in horticulture area)

Overview of property including features and proposed development facilities:

04Governance and stakeholder engagement

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Governance and stakeholder engagementAs in all organisations, governance is critical to success. The ASB Bank MAGS Farm development is no different. A governance and management structure will ensure practical and effective operations of the ASB Bank MAGS Farm and the Experience Centre now and into the future, and is vital for the project to be able to deliver against its long term objectives.

There are three key areas of operation that need governance:

• The operation of the Agriculture and Horticulture curriculum at Mount Albert Grammar School as well as making this accessible to other schools in the Auckland region,

• The operations on a day-to-day basis of the ASB Bank MAGS Farm including stocking decisions and responsibility for ensuring the farm operates as world class urban display farm.

• The management and operation of the Experience Centre including the development of the centre, operation of the experience programme, maintenance of online teaching materials and running of the conference and hospitality activities.

It is also critical that the MAGS Foundation preserves its charitable status.

Following discussions between MAGS, MAGS Board of Trustees (as lessee), the Foundation, ASB Bank (as lessor of the farm land) and industry partners, we have proposed a management and governance structure that is appropriately scaled to effectively operate the education programme, the farm and the Experience Centre and ensures that the right capabilities and enthusiasm for the project are appropriately leveraged.

An important element of the proposed governance and management structure and to meet the requirements of the lease, MAGS Board of Trustees are required to retain responsibility and accountability for the running of the farm and the provision of agricultural and horticultural courses.

The proposal is for the Foundation, under a Charter to be agreed and signed, to manage the redevelopment of the farm and experience centre and its ongoing management, with advice and guidance from a yet to be formed Farm Advisory Group. The Farm Advisory Group will comprise industry and other individuals appointed by the Foundation who bring relevant skills and experience with repsect to the proposed development and ongoing best practise operation of the farm and experience centre.

The development and operation of the ASB Bank MAGS Farm and the Experience Centre will be done in a manner that complies with the lease, all relevant legislation and with understanding of the risks associated with operating such a facility in an urban area.

Focus on ‘commercial’

farming operations.

The key message to community

stakeholders is that the ASB Bank MAGS Farm supports the preservation of the area as a farm for the next century.

Stakeholders and industry partnersIt is acknowledged that the ASB MAGS Farm has a large stakeholder group, across the school, the community and the industry.

At all times, consideration and communication with all stakeholders will be of primary focus.

Industry partnersFoundation partners, the university partner, MPI and other organisations that support the development will have the ability to be represented in the ongoing operation of the facilities through involvement in the Farm Advisory Group.

05Funding and next steps

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Funding and next steps

Acknowledgement must be made to KPMG, Fonterra, Landcorp, Te Tumu Paeroa (The Maori Trustee), Plant & Food and NZX Agri alongside MAGS and ASB Bank who are the initial funding partners of the ASB Bank MAGS Farm development. KPMG has used this funding to draft a business case, and can provide more detail on request.

The project will require initial capital funding to cover the costs of the development of the farm and construction of the Experience Centre. There will then be a need for ongoing funding to cover farm operating costs as well as the day-to-day operating costs of the Experience Centre.

The funding process and strategy will need to be defi ned once fi nal decisions are made by the management and governance committees on the details of the plan moving forward. However, if possible, preference would be to raise an initial endowment that can be invested to cover part of the ongoing operating costs of the organisation rather than having to continuously seek new donations to enable day-to-day operations to continue.

There are multiple potential sources of funding for both capital expenditure and operating costs with the options including:

• Corporate donations: Cash donations, sponsorship or gifts of equipment or consumable products for use on the farm or in the Experience Centre

• User pays activities: Generate income from running events

• Government programmes and initiatives

• Primary Industry community funding: small individual contributions, buy a brick campaign

• Philanthropic trusts and high net worth individuals

• Former pupils of Mount Albert Grammar School (Albertians’ Association members)

• Debt funding (only considered if there are guaranteed future income streams and there is a true timing mismatch)

Industry support

We have an opportunity to develop a world-class teaching and Experience Centre in the heart of Auckland but we do need your help. If you would like to contribute to this exciting development, please get in touch with ASB, KPMG or MAGS directly below.

Tim KayDirector of AdvancementMount Albert Grammar School Foundation021 636 803tkay@mags.school.nz

Mark HeerGeneral Manager, ASB Rural021 223 4717Mark.Heer@asb.co.nz

Ian ProudfootGlobal Head of Agribusiness021 656 815Iproudfoot@KPMG.co.nz

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