Organic dairy co-op files for liquidation
A co-operative touted as New Zealand's only 100% farmer-owned organic milk producer has gone bust.
Its 2016 Agribusiness Agenda, released at National Fieldays, says the global pace of change is so fast that NZ has to run harder just to stand still.
KPMG global head of agribusiness Ian Proudfoot says 2016 is seen as the beginning of the 'fourth industrial revolution', bringing changes in which old business models and ideas are being overtaken by a new order.
He says many people in the primary sector complacently go on believing NZ has always been successful -- for many decades a world leading primary exporter. But like the NZ Sevens rugby team, NZ's primary sector must realise other countries have caught up and are passing us.
"In the case of sevens rugby the prize has changed," he explains. "The prize is now an Olympic gold medal and suddenly a lot of countries are interested, whereas in the past when the prize wasn't nearly as exciting we were able to dominate.
"We can't [take this leadership position for granted], but must work hard to maintain it. One example is European farmers: we talk a lot about their inefficiency given that they receive a large part of their income as subsidy. But... they really understand their consumers, they are passionate about the food they are producing and we should be trying to learn from them because that is lacking in our industry."
Proudfoot cites the Irish with their brand Origen Green as well ahead of NZ. And the French are even further ahead because their farmers are so passionate about the world class dairy products they produce.
One NZ cause of complacency is that some company directors still live in the "analogue rather than the digital age". The problems are in the mindsets of board members rather than their age, he says.
"People get onto boards, particularly in the primary sector, because of their connections and networks. That doesn't mean they aren't competent and haven't got great ability, but do they have the right ability for where their organisations need to be looking to move in the future?"
Proudfoot favours seperating representation and governance: having the right people in the boardroom to govern an organisation, and having a strong, separate representative body that holds the board to account on behalf of all stakeholders. Such a structure resembles the present Fonterra model.
He says the end-game is to get people onto a board who have the right skills to lead a company into the future.
The 70-page report singles out Landcorp for special mention.
"The Landcorp case study is a great one, about a very traditional company that has now recognised the future will look different and is taking practical steps to move in that direction," Proudfoot says.
"[It shows] a good example of what should be done. I don't think enough companies, particularly at board level, are recognising the scope of change."
