it comes to sorting out the red meat industry, Ross Hyland
likes to use an analogy, comparing it with the situation Air
New Zealand faced.
When former chief executive Rob Fyfe and chairman John Palmer
came on board, they questioned why the company was flying
planes ''half full'' up and down the country. But instead of
launching promotions to try to fill those planes, they
''Bums on seats'' in the airline industry was no different
from lambs on chains in the meat industry, Mr Hyland, a
Waikato agribusinessman and principal adviser to Meat
Industry Excellence, asserted.
The major capacity issues in the meat industry were probably
the ''number one'' problem, he said.
When MIE's business model came out, it would have a
vision to give to farmers about how to reduce capacity,
chairman John McCarthy added.
Mr Hyland and Mr McCarthy were in the South recently as part
of a drive to ''gauge the pulse'' of stakeholders in the
MIE, which was formed last year to push for reform in the red
meat industry, is promising to give farmers a ''road map''
for that reform.
The group recently received funding from Beef and Lamb New
Zealand for its business plan.
The $219,000 project included MIE contracting independent
consulting firms to research improved procurement models,
flow-on effects on industry profitability and communicating
those findings to the sector.
Mr Hyland said it was not about whether things had lifted
slightly at the moment, and farmers were doing a little better
- the fundamentals still ''absolutely'' had to change.
But MIE could not come up with potential options or solutions
without engaging with those involved.
During the trip to the South, they met with the likes of Blue
Sky Meats, Alliance Group, Prime Range Meats and Silver Fern
Farms, along with ANZCO Foods in Canterbury.
Asked what sort of response there had been from the
companies, Mr Hyland said it had been ''largely positive''.
Some thought some of the goals concerning contracted
procurement were in the ''too-hard basket''.
The first thing that had to be done was to get companies back
to being profitable, while two-way loyalty and transparency
was needed - and that was not just when dealing with
co-operatives, he said.
Mr McCarthy said the fundamental message they had from
farmers was they were sick of lack of trust and sick of
co-operatives ''playing favourites''.
Companies were throughput-reliant and that needed to change.
A stable procurement platform was needed, along with
Farmers were ''crying out for a road map'' on how to get
there and it was not an easy task, he acknowledged.
A national survey of 800 farmers was being conducted by a
professional research company.
That was about trying to understand farmers' awareness of
what contracted supply meant, their commitment to that kind
of process, and their understanding of the difference between
corporate and co-operative ownership, Mr Hyland said.
He believed if a vision could be created for farmers to turn
things around, then the hard questions could be asked,
answered and funded.
But MIE could not do it alone and, if farmers did not buy in,
they would not get the future they wanted, Mr McCarthy said.
While acknowledging it was a ''monumental hurdle'', Mr Hyland
said what MIE could do was start to provide the vision, the
key things that had to happen.
Both men said it was ''not all about price'' but about the
fabric of rural New Zealand.
Mr Hyland loved ''the very essence of what makes New
Zealand'' and a lot of that was around the rural fabric.
If control was retained over the industry and it was run
profitably, then the likes of the local school buses,
churches and community halls would be supported.
Control had been lost in the processing sector in Australia
and it was an example of ''what not to do'', Mr McCarthy
He believed the rules concerning foreign farmland ownership
needed to be revisited, in light of the potential sale of the
13,843ha Lochinver Station, in the central North Island, to
Chinese company Shanghai Pengxin.
There were some good foreign owners but there had to be a
differentiation between those who lived and worked beside New
Zealanders on the land, and those who wanted to take the
fruits of their investment out of New Zealand.
''We can't surrender control of our value chain,'' he said.
Mr McCarthy said a key message from the trip was that it was
bigger than the red meat sector - it was a national issue.
Mr Hyland said Mr McCarthy and the other members of MIE were
an ''incredible bunch of passionate people''.
They came from inter-generational farming families who wanted
to preserve that for future generations.
The MIE team had no political ambitions, rather it just
wanted to make the ''sector right'' - ''not join the
Beehive'', Mr McCarthy added.
''We will give it our best shot and we're not going away,''