Crucial times for sheep and beef farmer leadership

The referendum in August will determine sheep and beef farmer representation by Meat & Wool New Zealand (MWNZ) and funding of its activities from April 2010. Under the Commodity Levies Act MWNZ must seek a mandate every six years from farmers who have one vote per farm and one per 250 sheep and goats, 50 beef or 100 dairy cattle.

 

Six years since the joint meat and wool body was formed, legislation demands a review to establish whether farmers are satisfied with its performance and proposed activities. To perform its programme, MWNZ needs a substantial increase in the levy; otherwise it must either reduce the amount of work it undertakes or fund the shortfall out of Meat Board reserves which it has already done. These decisions will be up to farmers when they vote for or against the final proposal.

 

One extra complication has been avoided with a recent decision by the Meat Industry Association’s (MIA) vote against a merger with MWNZ. If the terms of a merger had to be worked out before the referendum, farmers might not have known what they were voting for and how much it would all cost, so on balance it may be a relief to keep it simple.

 

It does raise the question whether consolidation of industry representation is a good idea, rather like the consolidation of processor ownership which fell at several fences last year. Long term you would think mergers and rationalisation are desirable, but these must be commercial decisions reached after mature consideration. I’m not sure the industry – farmers, processors and exporters – is quite ready to combine its ambitions and goals under one jointly funded body, because, while there are some common objectives, neither party is yet ready to agree on them all.

 

Farmers of course will say they have to pay for it all in the end, whoever is contributing the dollars, but there would still be the question of what proportion should come direct from farmers and what from each meat company. At present, funding of in-market promotional programmes is shared equally between the parties, while farmers bear the full cost of on-farm programmes.

 

The MIA vote produced an almost perfect, but contradictory, 80/20 result on a simple poll basis – about 80% of members against, but the other 20% with 80% of throughput in favour! This indicates the small companies were by and large concerned at losing their ability to influence what happens in the industry, while the big boys, presumably predominantly farmer owned, were confident they could work within a joint structure.

 

The Australian model where Meat and Livestock Australia (MLA) represents the whole industry serves as potential template for New Zealand, but MLA has funding and governance advantages over an equivalent body here. The Federal Government funds R&D on a dollar for dollar basis, while MLA’s board is more broadly representative of stakeholders with producer, processor, consumer goods and banking industry members. While MLA negotiates co-operative programmes with processors, exporters and food service providers, the majority contribution comes from levy payers per head of livestock, which are roughly in line with the levies proposed by MWNZ for the next six year period.

 

The most notable advantage the Australian industry has is the National Livestock Identification System, similar to NAIT’s proposed system, assuming Federated Farmers don’t succeed in their campaign to kill it.

 

Which brings me to the subject of industry leadership: MWNZ lists leadership, representation and influence as its number one activity area, in importance if not in dollars invested. When Feds set such a poor, misguided example of industry leadership, it’s even more important for sheep and beef farmers to be represented by a body which can provide the leadership they deserve.

 

I advise farmers to think very carefully before voting against the referendum proposal, even if they don’t want to pay increased levies. After all the Aussies are already paying this sort of money and they’ve had a pretty tough time of it too!

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One Response to “Crucial times for sheep and beef farmer leadership”

  1. Cuppa kiwi tea anyone? « The Bull Pen Says:

    […] Allan Barber has pointed out that “the Aussies are already paying this sort of money and they’ve had a […]

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