Grumpy sheep farmers; Fonterra in a tough spot; funding failure; where the money went?

By Allan Barber

There are four local issues exciting particular interest in the agricultural landscape at the moment: the ram breeders’ testy meeting with AgResearch in Gore, the case against Fonterra by MPI, the failure to award grants to three major research institutes, and Silver Fern Farms’ Eating Quality beef grading system.

Grumpy sheep farmers

First the meeting in Gore when AgResearch finally fronted up to the ram breeders and sheep farmers from the deep south to hear their complaints about relocating most of the scientists from Invermay to Lincoln.

Unfortunately for the disaffected farmers AgResearch seems to have made its mind up a long time ago about its Future Footprint Programme which will see two hubs at Massey and Lincoln.

After the meeting on 12^th March, the word is that the Board will look at the issue again, but only very limited tweaks are expected.

Meeting convenor, Hugh Gardyne, intended to move a vote of no confidence in AgResearch’s board and management, but didn’t get the chance to table the motion.

My impression is that the group has shot its bolt and is unlikely to achieve any significant change to the plans.

Fonterra in a tough spot?

The four charges MPI has brought against Fonterra, significantly on the eve of the Prime Minister’s visit to China, accompanied by Fonterra Chairman John Wilson, are that it processed dairy product not in accordance with its Risk Management Programme, exported dairy product that failed to meet relevant animal product standards, failed to notify its verifier of significant concerns that dairy product had not been processed in accordance with its RMP, and failed to notify the Director General as soon as possible that exported dairy product was not fit for intended purpose.

Fonterra has agreed the charges are justified, noting that they are consistent with its own operational review and independent board enquiry.

The question I have is what this does to Fonterra’s defence against Danone’s multi-million dollar claim for compensation.

It occurs to me that it’s not easy to accept guilt on the one hand while rejecting a damages claim arising from the botulism scare that resulted from these selfsame actions on the other.

Funding failure

The next issue which raises serious questions is the failure of the Riddett Institute, Gravida and Bio-Protection Centre to make the shortlist for research funding of up to $35 million.

Federated Farmers have asked whether the Government has set the right balance between competition and the certainty required to enable science planning and collaboration.

The major concern is the damage that will potentially be done to food science, animal productivity, biosecurity and sustainability which has been the focus of all three research institutes for a number of years.

To cut funding from each of them now places at risk the investment in agriculture which is such a critical part of the country’s future prosperity.

Where the money went?

The final topic of interest is the launch of Silver Fern Farms’ high value beef range, processed from animals which achieve the Eating Quality Master Grade.

The irony here is that funding for this programme has come from a combination of Government and private sector funding in the form of a PGP partnership.

While there is much to commend about the PGP process, it is theoretically detracting from funds to be allocated to science of the purer kind practised by the three Centres of Research Excellence (COREs) that have missed out on the latest round of funds.

Having said that the Eating Quality System is designed to improve the overall quality and market price of beef sold at retail and into food service which will then provide beef farmers with the means of consistently producing higher quality and more profitable cattle.

The ultimate intention is for both processor and producer to earn a better return.

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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 ».