Get real about where the money comes from

Allan Barber in his blog looks at the issue of attracting equity into NZ's agribusiness companies.

He talks to Murray Sherwin, the Director General of the MAF, Bill Falcolner, Meat Industry Association, and Andrew Talley of the Talley Group and AFFCO'shareholder. 

He gets three different views on the subject some related to the  different forms of ownership structures, they represent.

From the discussion, he believes we need to be more realistic about foreign investment, if we want to grow the agribusiness capital in NZ.

There’s a lot of noise around about the lack of equity available to invest in NZ agribusiness companies. Murray Sherwin MAF  acknowledged the enormous challenge in getting farmers to invest meaningful amounts of capital off farm.

Bill Falconer, Primary Growth Partnership and Meat Industry Association chairman, was reported as proposing greater government investment in agricultural companies as the means of helping them to grow while retaining NZ ownership.
 

Talley’s Group has grown organically because it’s a private company and has taken the long term view, electing not to pay any dividends, but to put the capital back into the business. He said it’s important not to confuse size with success, believing firmly we should expect companies to earn their success through good management and direction, not through statutory decree like Fonterra and the SOEs.

ANZCO, Sealord and Universal have substantial overseas shareholders who appear to have had an entirely benign influence on those companies which suggests there is no reason for paranoia when foreign capital is invested directly in our companies.

I suggest we need to be more realistic about sources of capital to fund the growth of our agricultural sector when neither government nor farmers are willing or able to increase their level of investment.