What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
Fonterra and its 10,500 farmers are facing tough times; the diminishing payout is causing anxiety. And at a time when many farmers are vulnerable, the 14-page ruling by Judge Smith will offer them little comfort.
The judge is scathing to say the least and he wants the message to be relayed to Fonterra directors and management.
“When Fonterra, who has taken it upon itself to be responsible for improving farm operations through its farm advisors and audit systems for ecological reasons, is found to have failed to invest in such a basic way, this task is made more difficult and this is a significant disappointment to this court.”
“I hope you will communicate that to the directors and the management team,” he told a Fonterra representative in court.
Fonterra and its farmers are under close scrutiny; most environment groups are watching the dairy industry like hawks. The co-op is blamed for everything from polluting waterways to the high price of milk on supermarket shelves.
This conviction and the strong judgement gives the greenies more ammunition to attack farmers.
Fonterra says as part of an annual audit of irrigation operations at Edgecumbe it identified a list of equipment needing repair or replacement. The work was underway at the time of the discharges and has since been accelerated -- replacing worn and aging irrigators and pipes, strengthening and relocating hydrants, better inspecting irrigation and stormwater systems, and doing more staff training.
Fonterra has accepted the judgement and the $174,000 fine, apologised to the community and its farmers, and said it will not repeat the offences.
Fonterra takes its obligations under the Resource Management Act seriously and acknowledges the need to increase controls on irrigation operations and stormwater systems. It continues investing in these systems and the people that manage them to ensure it meets environmental best practice.
At a time when farmers are under the pump, facing budget blowouts and cashflow issues, the last thing they need is public humiliation. Now let’s see the co-op put this sorry saga behind it and work to quickly regain the top environmental credentials it is known for.
