DCANZ chief bows out

Bailey says individual farmers and the industry itself have invested massively to minimise the environmental footprint of dairying and there have been some real success stories that have not been recognised.

"Yes, people can still say nitrate levels on farm are still too high, but the pathway of progress has been something to be proud of," he told Dairy News.

"It's a bit of race with no end because you are setting your goals to be even better and I just reflect on the fact that every economic activity has some sort of environmental footprint. In my view, there is a lot of misinformation out there about what is the true state of the industry," he says.

Bailey says people tend to forget that the primary sector is the engine room of the NZ economy and that significant money for health, education and other services comes from agricultural exports.

He says a lot of people fail to see that the financial benefits of the dairy sector are shared right across the country.

"You sometimes read a report about the average NZ water quality which paints a negative picture. Well, NZ water is actually outstandingly high in world terms.

Sure it's not at a level across NZ that we are happy with, so that's why we continue to invest in improvement. But remember we are starting from a base that most countries in the world would think was a pretty good place to start," he says.

The DCANZ executive committee thanked Bailey for his tireless commitment to advancing the best interests of the New Zealand dairy industry over the last 14 years.

In a statement, DCANZ says Bailey's tenure as the chairman has spanned: multiple trade negotiations of significance to the New Zealand dairy industry; the establishment of the New Zealand Government and Industry Agreement on Biosecurity Readiness and Response (GIA), the New Zealand Dairy Tomorrow Industry Strategy; and the He Waka Eke Noa primary sector climate change partnership; and periods of major changes in dairy markets, including the global financial crisis and Covid-19 pandemic.

DCANZ and its members have benefited considerably from his vast experience, knowledge, and leadership.

The leading role Bailey has played in New Zealand's primary sector over a long number of years was recognised in 2021, when he was the recipient of the Primary Industies Outstanding Contribution Award.

He will be replaced by University of Waikato academic Matt Bolger.

About The Man

Malcolm Bailey grew up on a mainly dairy farm near the township of Fielding in the lower North Island.

He still farms there today, with his son doing much of the on-farm work while he focuses on his numerous other roles.

After completing a bachelor of ag economics, Bailey left the family farm for the Wellington bureaucracy, taking a job in the economic section of the Reserve Bank in 1980. His role was to crunch some of the balance of payments numbers and it was there that he experienced the power of one Robert D. Muldoon whose interventionist policies was one of the reasons they young Bailey eventually went back to the family farm.

"As far as I was concerned he was a lying crook who took the NZ economy in completely the wrong direction, but the Reserve Bank could do nothing, despite a lot of the officials hating what was going on but couldn't speak out publicly.

"In some ways it was a pity because when I told the bank I was leaving they said they had plans for me including secondment to the OECD in Paris," he says.

Back on the farm and into the dairy industry, Bailey entered farmer politics, which eventually led to him becoming president of Federated Farmers between 1996 and 1999. Immediately after that he was appointed NZ's Special Agricultural Trade Envoy which saw him take part in what turned out to be the abortive WTO Doha trade round in 2001.

When Fonterra was founded in 2001 Bailey was elected to the Shareholders Council. Three years later he was on the Fonterra board. It was this that led to his appointment 15 years ago as the chair of DCANZ. In between time he also spent time of the board of the Westpac bank.

Bailey says, DCANZ, which represents.th 13 milk processing companies, has added much value to the dairy industry and to the wider NZ agri sector. He says DCANZ has embraced competition and that is evidenced by the fact that it has 13 members, including one representing sheep milk and another goat milk.

"The organisation has enabled us to unlock a lot of value and see investment in further processing. We have got companies doing their special thing and not undercutting each other. Companies have found their sweet spot in these different markets and they are going for it. Looking back we have created something to be proud of," he says.

A feature of DCANZ has been to work closely with other primary sector advocacy groups such as the Meat Industry Association (MIA) where the two organisations cooperated on the M. bovis outbreak, animal welfare and other biosecurity issues, and in the recent NZ/EU FTA negotiations.

Advocacy for greater international trade liberalisation and opposition to countries which employ protectionist policies and subsidise their farmers has been a key focus for DCANZ. Bailey has long been an outspoken critic of protectionist policies in his role as Special Agricultural Trade Envoy and as chair of DCANZ. He's been a strong critic of the EU's policies and doesn't accept the arguments they put up in the recent NZ/EU FTA negotiations.

"I can't understand how the EU can argue the sensitivity in the dairy sector when they are the world's largest dairy exporter. For them to say they can't liberalise their market beyond the tiny amount they have given us doesn't add up at all. Even though we have had a number of good FTAs signed we still only have access to 13% to 15% of the world market for dairy products. The rest is essentially closed to us by high tariff barriers, so it is a very protected market. In actual fact, dairy is one of the worst sectors of all in terms of protectionisms," he says.

Bailey says overall the dairy sector in NZ is in good shape in terms of competitiveness. He says in world terms it is very strong but is facing challenges on the home front. These include the realisation that there is unlikely to be any new land available for dairying and that this may even decrease in some catchments as the sector tries to meet new environmental regulations. But he says the good news is that, even with milk production slightly down at times, the sector continues to increase its export revenue and add value to the raw product.

"Intensification in processing has driven more value," he says.