Primary Growth Partnership

For business-led, market-driven primary sector innovation

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 projected GDP return from the PGP as a whole is $6.4 billion per annum from 2025, as assessed by the New Zealand Institute of Economic Research (NZIER) in May 2014. The PGP also has the potential to achieve an additional $4.7 billion per annum by 2025 if all the R&D is successful, the aspirational stretch of PGP programmes is achieved, and the innovations are widely uptaken. (See further below under ‘Background’ for a report by the NZIER on the potential economic benefits from current and future PGP programmes).

Government funding is released to programmes 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 October 2014, total government funding paid to programmes underway was $124.8 million. The budget appropriation for PGP (excluding the NZAGRC) is approximately $62m per annum; it has not been fully expended in any one year to date.

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

As at 1 November 2014, there are 16 PGP programmes underway and two completed programmes. The total PGP funding commitment from government and industry across  these programmes is $694 million. (See further below under ‘Background’ for a report by the NZIER on the potential economic benefits from current and future PGP programmes).

PGP investment by sector (November 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 closed on Wednesday 25 June 2014. Four proposals were received, requesting $9.3 million in Crown funds. The Investment Advisory Panel met in August to assess the proposals. Three proposals were declined, and one was approved with further information to be provided before the Business Case is submitted.

Since the first round closed in October 2009, the PGP has received 105 proposals. Eighteen of these are now contracted programmes, with a further four in business case development.

Current PGP Programmes

Completed 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

News

Agri-gate – news from the Primary Growth Partnership

Media releases from MPI

Media releases from the Minister for Primary Industries and Associate Minister for Primary Industries

     

    Last Updated: 14 November 2014
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