Primary Growth Partnership

For business-led, market-driven primary sector innovation

MPI is now seeking applications for new Primary Growth Partnership (PGP) programmes. Applications must be received by MPI by 12pm on Wednesday 25 June 2014.

If you’re interested in putting forward an application, we encourage you to contact the PGP team, and see the PGP application guidelines for further information.

Introduction

The Primary Growth Partnership (PGP) is driving the future market success of the primary industries through long-term innovation programmes that are jointly funded by government and industry. A key goal is to encourage more private investment in research and development in New Zealand, which is low by OECD standards.

The PGP programmes are primarily business-led and market-driven innovation programmes that work across the primary industry value chain. The PGP is about boosting productivity and profitability, and delivering long-term economic growth and sustainability across the primary sectors, from producer to consumer.

MPI is committed to helping the primary industries to double the value of exports by 2025. This is the Ministry's contribution to the Government's Business Growth Agenda target. Achieving this will require significant changes in the way the primary industries operate – to increase both volume and value of exports.

The PGP is one of the most tangible examples of how MPI is partnering and enabling to help the primary industries reach their maximum potential. The partnership between government and industry ensures that there are commercial drivers for the programmes.

The overall funding provision was organised in Budget 2009, with provision of $30 million for 2009/10, $40 million for 2010/122, $50 million for 2011/12, and $70 million per annum from 2012/13 to be appropriated to Vote: Agriculture and Forestry. Government funding is released in stages on the receipt of invoices for work undertaken by contracted programmes in accordance with that programme's contract and programme plan. As at 31 March 2014, total government funding paid to the 15 programmes underway was $98.1 million.

The PGP has been successful in attracting high-quality investment proposals.

There are 18 announced PGP programmes (15 contracted and three pending) as at 1 April 2014. The total PGP funding commitment from government and industry in these programmes is $708 million. They are expected to generate economic benefits worth approximately $7 billion per year by 2025.

PGP investment by sector (April 2014)

PGP investments cover education and skills development, research and development, product development, commercialisation, commercial development and technology transfer. The benefit of a programme must be anchored in New Zealand, and must be additional to existing initiatives and work programmes - that is, beyond business as usual.

A six-person Investment Advisory Panel (IAP) chaired by Joanna Perry advises the Ministry for Primary Industries on PGP investment decisions, and plays an ongoing monitoring role for contracted programmes. Final decisions on proposals are made by the Director General of the Ministry.

Funding rounds

PGP Round Ten is now open and closes at midday on Wednesday 25 June 2014. See above for details.

PGP Round Nine closed on 19 September 2013. Fourteen proposals were received, requesting more than $110 million in Crown funds.

The IAP met in early November and made its decisions. One proposal was approved for Business Plan development, twelve were declined and the IAP requested further information on one proposal before making its decision. Of the twelve declined proposals, some have been asked to either resubmit revised proposals or engage in further discussion with MPI. 

The proposal for which further information was sought was subsequently approved in December 2013.  All applicants have been advised of the Panel’s decisions.

One of the proposals for which revisions were sought was re-submitted in February, and approved by the IAP for Business Plan development in March 2014.

Current PGP Programmes

Governance, monitoring and assurance

Good governance, monitoring and assurance are important to protect all the interests in the PGP programmes.

Read more on Primary Growth Partnership – Governance, monitoring and assurance

Guide for new proposals

The success of the PGP is dependent on industry groups coming up with ideas and being willing to back them with co-funding. This is an opportunity for primary industries to secure their future through innovation that will create new opportunities or overcome current challenges.

The minimum amount the Ministry will invest in a PGP programme is $500,000 (excluding GST), and this must be matched (or exceeded) by the industry partner. The PGP programme is open to almost any entity, including firms, industry bodies, private research organisations, individuals, Crown Research Institutes and local government businesses. However, Crown or rate payer money cannot be used to match the Ministry's PGP funding.

There are six main steps in the PGP Application Process leading to the establishment of a co-investment programme. Once a funding round is closed the Ministry forwards the proposals to the Investment Advisory Panel. Proposals are then assessed by MPI and the IAP. This process takes approximately six weeks (steps 1-2).

The PGP Investment Advisory Panel plays a key role in this process, assessing applications against the PGP co-funding criteria, and advising the Ministry for Primary Industries on PGP investment decisions. Funding decisions are made by the Director-General of the Ministry.

It takes about nine months for a programme to get from the point where the Panel makes its decision on a proposal (step 2), through the business plan phases (steps 3 and 4, which are overseen by a Programme Steering Group from step 3 onwards), to the contracting phase (step 6).  The application form, and other resources to help you with your application, are available in the Primary Growth Partnership Eligibility and How to Apply section.

PGP contract

The contracting phase is when the Crown and co-investor/s work out their contractual obligations for the investment partnership. The template contract below is the starting point for this process (see the link under “Background Information”). The Crown expects that all programmes will be contracted on terms which are substantially similar to the template, and recommends that you familiarise yourself with the contract template prior to submitting a proposal.  MPI recognises that the template may require customisation for each programme, but is not likely to agree to substantial changes to some clauses. Explanatory notes are included in the template, but in summary:

  • co-investors may be required to return all Crown funding in certain circumstances;
  • co-investors must provide the Crown with an indemnity from third party claims in relation to the programme. This is because the limit of the Crown’s financial exposure in relation to any programme is the provision of the agreed funding;
  • in certain limited circumstances, co-investors must transfer to the Crown any new intellectual property generated during the programme;
  • co-investors may be required to execute a guarantee in respect of the performance and funding of the programme.  This is usually the case if a special purpose vehicle with limited/no assets has been set up by the underlying investor(s) for the purposes of performing the programme.
If you have questions regarding the PGP, please send an email to pgp@mpi.govt.nz.

Background information

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Last Updated: 07 April 2014

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