Allan Barber says co-op member farmers must take the initiative in reform and demonstrate that by making supply commitments

By Allan Barber

I have the greatest respect for any group that commits time and effort at their own expense in the pursuit of a common good.

I know from personal experience just how difficult it is to achieve significant goals without serious investment of both time and money – a small team of enthusiasts must invest the time, but money is the hardest thing to obtain.

But to have any chance of raising funds, there has to be a clear plan which lays out in achievable stages exactly how the money will deliver the desired outcomes.

In spite of a lot of noise, the Meat Industry Excellence Group is still failing to articulate its strategy for building a sustainably profitable meat industry.

Just over a week ago, MIE adviser Ross Hyland was guest speaker at the Beef + Lamb Mid Northern farmer council annual meeting. He used the platform to lay out what was wrong with the meat industry and told Beef + Lamb it should save $1 million a year expenditure on offshore marketing. Instead it should be given to MIE, he said.

He was quoted as saying "You might as well bring the money back home, focus on these guys and give them an outside chance so their kids and their grandkids will have a processing industry which you still have an element of control."

But what he signally failed to do was indicate what the funding would enable MIE to do that would actually save the industry and how it would give any control.

Of course it’s a well nigh impossible task, borne out by the failure of any other experts to design a strategy which has been able to come close to solving this perennial problem.

But unless MIE manages to convince potential funders that it has found the answer to the conundrum, nobody will invest money and the newly reconfigured industry will remain a pipedream.

Recent moves by MIE executive members, since resigned, to stand for the boards of Alliance and Silver Fern Farms are a positive recognition of how best to exert influence.

To have any chance of achieving change you have to be inside not outside the tent. But it’s not clear how much influence one or two new directors will have.

There is also the strong impression a merger of the two cooperatives is seen as the best option for progress which is what the new board candidates will be angling for, if they are elected.

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Even if these steps are achieved, there is the pain of plant closure and rationalisation to follow with an inevitable loss of market share.

A merged entity will end up with less than half the available livestock which is nowhere near enough to create a Fonterra lookalike.

It is an inescapable fact that the meat industry is not like the dairy industry and unfortunately, for several years now, not as profitable either.

But wittering on about the disadvantages of the competitive model, low prices and competing land uses including dairy conversions will do nothing to solve the structural problems.

Farmers have to take the initiative which is what MIE has been trying to do for nearly a year now.

The first thing is to do what Federated Farmers’ Meat and Fibre Chair Jeanette Maxwell challenged farmers recently which is to vote at the coops’ AGMs and elect the directors they want.

The next thing is to make a commitment to their meat company of choice and supply livestock to specification according to a delivery schedule, with contractual variations negotiated to recognise seasonal variations.

Change won’t happen overnight and not all seasons will be uniformly good, but a more strategic approach by all farmers to guaranteed supply patterns will get things moving in a positive direction.

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Here are some links for updated prices for
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Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he runs a boutique B&B with his wife. You can contact him by email at allan@barberstrategic.co.nz or read his blog here ».