Damien O’Connor, List MP Labour
Two critical decisions are being made by the farmer shareholder owners of two major agriculture cooperatives in the near future. Farmers are considering the short- and long-term implications of the proposals.
In the short term both sales will deliver cash into the pockets of farmers which is always welcomed. The long-term implications are far harder to calculate and arguably take us back to the days when overseas owners had more control of Kiwi farmers futures.
Fonterra is set to sell its consumer business and concentrate on service and ingredients products for customers who want dairy for their consumers. If sold it is unlikely that any of those consumers will be aware that Kiwi dairy farmers had any input into what they buy and eat. Our single most important export company will fail to fly the Kiwi flag for consumers in the 130 countries it exports to.
That is a lost opportunity for our small country’s efforts to be known and recognised across the globe. Fonterra farmer shareholders are hoping to get a higher and more secure return on their equity in the company, but their gain is arguably offset by our country’s loss.
Alliance Meats is selling down 65% of its cooperative farmer owned company to Dawn Meats, a family-owned Irish company. The coop has followed the path of Silver Fern Farms and mismanaged itself to the point where banks are demanding an injection of capital that the cooperative has failed to retain and farmers are unwilling to contribute.
The high-quality pasture fed meat protein from our animal farming systems will now be controlled and marketed by an Irish company not Kiwi farmers. Again, the short-term cash payout is likely to be offset by the long-term erosion of New Zealand’s profile in the minds of the millions of consumers who choose New Zealand meat because of its safe, high quality and pasture fed attributes.
The outcomes are hard to assess, and any owner of our farming outputs would be crazy not to promote their unique and outstanding values. But decisions about how and where this will be done is in the hands of the new owners, not Kiwi farmers.
While there is a view that farmers should farm and others should do the processing and marketing, there are plenty of examples where the real interests of the farmers are only genuinely protected long term by real farmers. That is why the cooperatives were formed and still exist across the globe — to protect the interests of supplying shareholders.
I have raised these issues before but now is a timely reminder to all those farmers thinking of the future and opportunities for their kids, that, OWNERSHIP DOES MATTER. Not just of the land and stock but of the customer and consumer supply chains. The value of the produce from the land relies upon the systems beyond the farm gate. Who owns and controls those systems will be the determinant of farming profitability.
Because unlike most farmers in the world who are peasants or protected through subsidies, here in New Zealand international and domestic consumer prices will determine our economic viability.
Alliance farmer shareholders have spoken and voted to sell. Fonterra farmers are yet to decide, but the chances are the cash payout is too tempting to reject.
We should think very carefully who owns our supply chains and who drives our destiny. That diet and destiny is now likely having a stronger Irish and French flavour. I hope we can prosper on what they serve up into the future.
