Fonterra appoints new CFO
Fonterra has appointed a new chief financial officer, seven months after its last CFO’s shock resignation.
Rural News understands the number of certified organic farmers has fallen from 127 in 2011 to 50-70 this year. Sources say there is little likelihood new certified organic suppliers will sign with Fonterra.
The number of Biogro certified farmers has fallen from 40-45 in 2009 to 31 in 2014.
Many farmers were in Northland and Taranaki, where the co-op no longer collects organic milk to cut costs. Industry sources say many organic farmers were in the greater Waikato region and were paid a premium for their milk because of tight regulations.
One formerly certified farmer dropped the certification when rules forbade the use of Tanalised fence posts; replacements had to be hardwood or concrete. “If I had known this I wouldn’t have got certified,” he told Rural News. “They seemed to be making it up as they went along.”
Prominent former organic Waikato dairy farmer Mike Moss is the latest to give up certification saying that while he supports the bulk of the organic standards New Zealand adheres to, some conditions stipulated by the US Department of Agriculture national organic program (USDA NOP), adhered to by New Zealand certifying bodies as part of the equivalence structure, goes too far.
“I’ve had to live within a very inflexible standard for far too long,” Moss says.
Okaihau dairy farmer Mark Clunie, also disillusioned by the work required to maintain certification, says the certification program seemed to have little logic. “The issue I had was that the people attracted to the certification process were more likely to make decisions based on a political point of view rather than decisions that make good farming sense.”
Decisions included a temporary ban on selenium in fertiliser mixes, a ban on magnesium oxide on pasture and, for a time, a ban on giving downer cows calcium borogluconate.
Moss says limitations on products with calcium borogluconate were unnecessary and caused bad feeling among animal health professionals towards organics.
“It cost a fair bit of following for organics in the dairying sector, and I know vets who privately voiced their frustration to me about how the system worked and the animal welfare compromises it could create.”
Moss noticed a big drop in paperwork when he dropped the certification. Getting approval to use any element, or taking any form of action not already approved by the certifying body, caused a lot of extra paperwork every year. This also put pressure on reps, who he had to ask for help in getting extra certificates needed for certifying agencies.
“My fertiliser advisor had to spend weeks going back and forth between his company and the organic auditors to get trace elements approved for use.”
Lucy Terpstra, BioGro communities manager, says initial standards come from overseas regulators and final input from New Zealand farmer reps, auditors and key staff from BioGro and industry players. BioGro gives licensees as much time as possible – about 12 months – to get ready for changes.
Hauraki Plains dairy farmer Ray Ridings says he managed to cut down on paperwork by applying for extra permissions at the start of the year when submitting an organics management plan.
“It means we -- as with any business -- must have systems in place to ensure records are kept up to date.”
Working with OrganicAg, a support network of organic farmers, Ridings says he was able to find feed and better negotiate an unexpected inspection by Korean auditors.
But Fonterra had become less communicative in its dealings with organic suppliers over the past 12 years, Ridings says.
“It’s been run poorly for 12 years and it’s now time for them to listen and involve the farmers in the management of the programme, rather than just handing down advice or instructions on something they know little about.
“Most other aspects of farming within Fonterra involve farmer reps at various levels. Why should the organic programme be any different?”
Fonterra declined to answer questions on organic programme numbers or the conditions farmers worked under, but Dianne Schumacher, general manager for milk supply technical and assurance, told Rural News in a written statement that the organics business was a niche part of the cooperative.
“Fonterra is always looking at ways to better use our collective knowledge and skills to improve our organic milk supply programme… how the co-op will meet consumer and market needs, including growing global demand for organics, and ensuring that we support our farmers by building a business model that is viable for the long-term.”
While the international market can be tight to get into Ridings says there are openings in the domestic market.
Moss says he has increased his focus on the local market, supplying raw milk and meat to neighbours as well as sending milk through Fonterra. He still sticks to basic organic principles, but he has no plans to certify while customers are happy with his products.
“We have an open gate policy – we’re up front about our farming practices and we run open days where customers can see first-hand how their food is produced.”
Ridings and his wife Madeline have long campaigned against palm kernel, palm oil and the use of GM feed in New Zealand.
“You can do things better with organics and natural health, but if a sick cow needs antibiotics to solve an animal welfare issue then I couldn’t name one client in the 140 people I supply who wouldn’t support it.”
