Industry reform not more marketing

MIE chair John McCarthy says it is becoming increasingly apparent that more of the same was never going to cut it. There is a compelling case for industry rationalization set out in its March report ‘Pathways to Long-term Sustainability’, funded by farmer levies through Beef +Lamb.

“Farmers got real value in that exercise,” says McCarthy. “We made more progress in eight months than in years of much more expensive consultants and reports. We drew on a lot of goodwill from professionals wanting this industry to return to growth.”

However, he says the interests of the status quo within the industry were once again stonewalling attempts by farmers to make progress.

“The fact that processor-exporters have been unable to agree over Beef + Lamb’s Joint Venture proposal demonstrates yet again the destructive model beyond the farm gate,” he says.

“It is a further demonstration as to why supporting more of the same is just a slippery slope.”

McCarthy says he does not blame the Beef + Lamb board itself, and the initiative appeared to be a genuine attempt to move the reform process along. However, farmers’ interests remained captive to processors’ veto, which was an outrageous state of affairs – especially when farmers were shareholders in more than half the processing interests.

“I can’t imagine another industry where the governors of the assets are acting against the interests of shareholders in such a cavalier fashion,” he says.

McCarthy says that he accepted an assurance from Beef + Lamb chairman James Parsons that he had requested MIE be part of the Red Meat Sector conference, but that MIA had vetoed this.

“We’re used to slaps in the face, but on behalf of farmers we’ve only so many other cheeks to turn!”

The latest agricultural production statistics released by Statistics New Zealand show sheep numbers across the country have fallen to their lowest levels since the Second World War.

Across New Zealand, sheep numbers fell to 29.8 million as at June 2014 a fall of 3% over the June 2013 figure. The Canterbury region where sheep numbers fell by 255,000 from 5.22 million to 4.97 million led the decline. The latest figures continue the trend apparent since 2010 when the total number of sheep stood at 5.65 million.

Over the same period, dairy’s expansion has continued. In 2010 total dairy cow numbers stood at 938,000, the latest statistics show this number to have increased to 1,333,000 an increase of approximately 42% over four years.

“This trend will continue and farmers will inevitably carry the cost unless there is a fundamental shift in the way business is done beyond the farm gate,” says McCarthy.

“This quasi alliance between Beef + Lamb and the Industry representatives has seen the sector lose 3000 sheep a day for the past 20 years but more importantly denies farmers the leadership they so desperately require as B&L is caught in the trap of trying to be all things to all parties.”

McCarthy says it is a waste of farmer money to put funds into marketing while more than 30 New Zealand exporters spent more energy competing on price and eroding New Zealand’s ‘provenance story’ as a premium producer.

“This tinkering approach from Beef + Lamb is not addressing the real problem and that is that farmers are effectively subsidizing and in fact underwriting a model that erodes value at every stage beyond their best efforts on farm.”

McCarthy says he believed that MIE had been responsible custodians of the small amount of farmer monies it had received, and remained largely voluntary and grassroots.

He says farmers had to realize that no one else was going to lead change in their industry.

“Unless we as farmers collectively commit to address the fundamentals of this model the slide will continue as will the decline in sheep numbers and the family farm as that cornerstone of our rural communities,” says McCarthy.