Farmer ownership imperative

Finding the solutions to implement change in the red meat industry is still the major barrier in reaching the Meat Industry Excellence (MIE) group's goals, chairman Richard Young says.

In his inaugural chairman's report, Mr Young said meat company talks had offered no solution to date. However, those talks were still continuing.

What it did offer, if successful, was a managed approach to dealing with overcapacity.

Managed rationalisations would have less impact on all stakeholders and offer better outcomes than unmanaged rationalisations.

However, it remained imperative that MIE, which was formed in March this year, continued to push for reform.

''To rely on the companies achieving this would be optimistic in the least,'' he said.

The group was ''very close to having a plan of attack'' and it was hoped to have that out by the end of next month.

Mr Young urged farmers to unite behind their co-operatives and support the concept of farmer ownership, saying such support was ''essential'' to rebuilding a strong red meat sector.

''The only way to remain in control of our own destiny is to have ownership of our processing and marketing arms,'' he said.

While the present co-operative model was not perfect and needed to be tweaked, if farmer ownership was lost, alternative owners would not have the best interests of farmers in mind.

Their focus would be solely on either company profitability and return to shareholders which ultimately would not be farmers, or on protein at the cheapest price, he said.

''If farmers are looking for direction moving into next season, our advice is to support a co-operative.

"Ideally co-operatives need to control sufficient critical mass to influence in procurement and market but we must start with what we can and build from there,'' he said.

The ''end game'' must be a farmer-owned co-operative that controlled the critical mass, embraced the principles of an integrated supply chain and understood and maximised the strengths of New Zealand's position in the global marketplace.

Mr Young said MIE's approach of engaging with meat companies in an attempt to find common ground was the correct approach. An approach that was based on conflict initially would have led to a ''short life'' for the group. It was essential MIE remained a ''powerful force'' in pushing for industry reform.

Funding streams were needed to allow the payment of the advisory panel and cost associated with the running of MIE, along with implementation of new blood on to the executive both to avoid burnout and bring in fresh ideas.

Strong discipline and clear messaging needed to be maintained, along with continued engagement with political and industry-good organisations. A clear picture of what the ''end goal'' was also was essential.

Mr Young, a West Otago farmer, has been re-elected chairman, with John McCarthy (Ohakune) continuing as vice-chairman. There are three new executive members: Blair Smith (North Otago), Tim Coop (Banks Peninsula) and Bruce Worsnop (Hawkes Bay).

Alliance Group will hold its annual round of shareholder-supplier meetings soon.

They will be held in Otautau and Gore on October 14, Balclutha on October 15, Omakau on October 17 and Lee Stream and Oamaru on October 21.


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