Optimising Rural Land Use Could Add Tens Of Billions To New Zealand Economy, New Report Shows

Tuesday, 27 May 2025, 7:57 am
Press Release: ASB

• Improving productivity by 10% through land use change could deliver $10 billion in value to the economy.
• Mixed revenue streams from diversifying farm systems key to driving value in future.
• Innovation from finance sector vital in supporting land use transition.
• ASB to launch research-backed land transition programme.

A new report from ASB and Lincoln University shows how smarter, more diverse land use could unlock billions in value for farmers and the wider economy, transforming the future of food and fibre by rethinking how we use our most valuable asset – our land.

The Future Use of Land and How to Fund It, a collaboration between ASB and Lincoln University’s Centre of Excellence in Transformative Agribusiness, outlines how land use optimisation across the food and fibre sector could significantly boost the country’s GDP, while also delivering social and environmental benefits.

Developed with input from leaders across the primary sector, including dairy, horticulture, sheep and beef, agritech, finance and government, the report explores four possible futures for New Zealand. Each scenario focusses on a single factor that will impact the food and fibre sector, for example greenhouse gas (GHG) emissions targets, or the government’s goal to double export values, and pushes them to the extreme, demonstrating the pressing need for change.

The research sets out seven transformational pathways, such as diversifying farm systems to introduce mixed revenue streams, increasing horticultural production, and unlocking underutilised Māori land. It demonstrates how better land use, paired with innovative funding, can unlock sustainable value across rural New Zealand.

Researchers have also developed a land transition model, providing land-use insights on a regional level. Agri-consultants can use the model to help inform potential paths forward for farmers.

“The food and fibre sector has always been a key driver of our economy, yet many producers operate on slim margins. We speak with farmers every week who are deeply committed to their land and legacy but grapple with viability, as they’re not getting the returns to operate sustainably into the future,” says ASB’s General Manager Rural Banking, Aidan Gent.

“This research brings together the insights and tools to help landowners make informed decisions for future prosperity.”

Rural land use transformation needed at scale

Alan Renwick of Lincoln University says optimising land use by just 10% could add $10 billion in value to the economy if it’s done in the right way, and this, or even more could be achieved in the next 5-7 years.

“The challenge facing the food and fibre sector is how to meet economic, environmental and social goals simultaneously. This requires practical, future-focused solutions – like integrating horticulture into traditional pastoral systems, developing on-farm processing to capture more value locally, or growing Māori agribusinesses around high-value niche products like manuka honey or native botanicals,” he says.

“We know these innovations are happening in pockets across Aotearoa – some stand out examples are included in our report as case studies – but we need to see this kind of transformation at scale.”

ASB launches New Zealand-first land use optimisation programme

Taking the research findings to the farm, ASB is launching Every Hectare Matters, a unique programme to support farmers to diversify and future-proof their businesses. This will begin with a small group of farmers, before being extended widely early next year.

The programme will pair participants with independent agri-consultants, who will use the new land transition model to help guide farmers through diversification and implementation scenarios, with wrap around support and tailored funding from ASB to bring their new business model to life.

ASB’s response to land optimisation was inspired in part by ASB customer High Peak Station in Canterbury, a once-traditional sheep and beef farm that has evolved into a diversified, family-run operation spanning tourism, honey, hunting and livestock. While their journey hasn’t been without challenges, the High Peak experience demonstrates what’s possible when landowners take a multigenerational view of land use.

Aidan Gent says: “This is about working alongside farmers ready to explore new opportunities – enabling change across generations, and helping farms stay in families. We’re not just backing farmers with capital. We’re backing them with insights, partnerships and the long-term thinking that makes meaningful transformation possible.”

ASB rural customers who would like to learn more about the land optimisation programme should contact their ASB Rural Manager.

Note:

The Future Use of Land and How to Fund It report is available to read here.

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