Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
International consultants Coutts J&R reviewed the impact on the pre-farmgate productivity and profit of the Transforming the Dairy Value Chain Primary Growth Partnership (PGP) scheme.
The seven-year, $170 million scheme, led by DairyNZ, Fonterra and the Ministry for Primary Industries, supports the creation of new dairy products, increasing farm productivity, reducing environmental impacts and improving agricultural education.
Consultants ran the rule over dozens of projects to see whether they achieved what they set out to, the actual work done, the benefits and likely future successes.
They say they found “strong evidence that the PGP programme has enabled the dairy industry to lead [in carrying out] significant national environmental practices, targets and regulations”. This “would not have been possible without the PGP’s intervention”, the review said.
It noted a “proactive approach to addressing greenhouse gas concerns” and that the dairy industry was “ready to provide the resources and rapidly roll out training in dairy regions”.
Justine Gilliland, director of investment programmes at MPI, says the review showed the PGP scheme is good for the environment and for increasing sustainability.
“The PGP aims to drive the future success of our primary industries,” she says, “ensuring they have the necessary tools and support to improve environmental outcomes.”
“The dairy PGP programme has done a lot of work on projects making a tangible difference for the dairy industry”.
Progress included upskilling rural professionals, developing training and certification schemes, beefing up the role of universities and giving farmers more advice and resources.
The review noted the Nutrient Management Advisor Certification Programme (NMACP) fills “a critical need in the industry”, so do Sustainable Milk Plans (SMP).
The NMACP had certified about 140 rural professionals to advise farmers on how to use nutrients efficiently and minimise their impact on the environment. The advisors had helped 9500 farmers (83% of the industry) to produce a nutrient budget showing how much nitrogen may be lost into their soils and leached into waterways.
Dairy companies and regional councils were using these tools to monitor farmer inputs and keep them up to their environmental obligations.
About 640 Waikato farms are in the SMP scheme. Farmers worked with rural consultants on nutrient and effluent management, land and water use and their environmental impact. Nutrient loss was “reduced by 5% for nitrogen and 12% for phosphorous” through the SMP project.
“The PGP funding set the framework, processes and tools for extension to other catchment areas, and is now working to produce 3000 plans in seven regions,” the report said.
DairyNZ chief executive Tim Mackle says the report shows that farming will lower its environmental footprint by using science.
“We’re taking the first steps in understanding what dairy can do – with the wider agricultural sector, industry and [cities] – to help meet New Zealand’s Paris Agreement emissions reduction target.
“Reducing onfarm emissions is not going to be easy. It requires our Government and the agricultural sector to work together.”
