Referendum result big challenge for Meat and Wool NZ

A voter turnout of 39% and a narrow majority for continued industry good investment in beef and sheepmeat, but no mandate for further wool and goat expenditure, isn’t exactly a ringing endorsement of M&WNZ’s final proposal to its members. Less than 8,000 out of a maximum of 20,000 levy payers actually bothered to vote in the referendum, while the 68 consultation meetings held by M&WNZ directors round the country attracted about 2,000 farmers, 10% of the total number of levy payers.

 

Three major challenges for any representative organisation are communication, engagement and relevance. At least co-operative members receive income, but a representative organisation without any ability to pay returns has an enormous job on its hands. The biggest challenge of all is to prove the value provided.

 

Bruce Wills, Federated Farmers’ Meat and Fibre Chairman, says it’s a real wake up call, because farmers struggle to see what M&WNZ does for them; but he adds there’s an irony in what farmers voted for as well as against: the main expenditure will now come exclusively from meat levies, although there was clearly dissatisfaction with both the levy increases and how the funds are being spent. Bruce finds the rejection of investment in wool very depressing, believing it signals the final nail in the coffin. The rejection of the wool proposal will only save $6.4 million, but it will have an impact across several investment areas without affecting meat market development expenditure, probably one of the biggest causes of farmer disaffection.

 

All this points forcefully to the necessity for M&WNZ to use the next five years to communicate with its levy payers like never before, because the alternative will be oblivion at the next referendum. Another similar drop in support means a No vote would be inevitable, at which point the farmers will lose their industry good organisation. While an increasing number of farmers are clearly not worried if this does happen, I don’t think they have thought through what they stand to lose.

 

The biggest challenge for M&WNZ is to get over the apathy of its levy payers, the 61% who didn’t bother to vote, although a fair percentage of those are probably dairy farmers who reckon they shouldn’t have to pay a levy in any case. The only solution to this is communication and Mike Petersen reckons the development of the sector strategy provides an ideal opportunity for the industry to work together. This exercise, if seen to be successful, will engage sheep and beef farmers and should ultimately demonstrate real value.

 

It’s important to define the different roles of each industry participant as members of the same team, because, until farmers recognise they are on the same team as the processors, the industry will never work together. James Parsons, M&WNZ Board member for the Northern North Island, has a neat analogy for the industry’s structure– he sees the farmers as the forward pack, doing the grunt work up front, the processor/exporters as the backs who do the flashy market stuff (and sometimes drop the ball), with M&WNZ as the halves who facilitate and distribute the ball. This sums the situation up pretty well, because it describes who has responsibility for each aspect of the game, while making it clear no single participant can do it alone.

 

This analogy makes it relatively simple to develop the sector strategy with clear objectives and key performance indicators against which each player must be measured. This will overcome unrealistic expectations, while making it possible to sheet home responsibility for failures or missed opportunities. I sense M&WNZ and meat processors get saddled with the blame for all that goes wrong, especially when market returns fail to enable adequate returns, but farmers often refuse to accept the reasons for the shortfall. These could be many and varied, including among others the exchange rate, economic conditions, store stock prices, climate, and livestock quality.

 

The first issues M&WNZ must address after its big wake up call are which programmes it will carry out to provide the best value, how to restructure the organisation to meet the new, reduced budget, and what to call itself after April next year when its wool involvement will cease.

 

M&WNZ still has a very important role to play in representing all sheep and beef farmers, but it has to ensure it uses its narrow reprieve to prove it can communicate to levy payers how it is delivering value. Otherwise it will be history.

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