Red meat industry change afoot

''Band-aid solutions'' might be needed to avoid potential problems in the red meat sector next season, but a long-term view is essential to finding the right solutions, Meat Industry Excellence chairman Richard Young says.

More farmers have gathered to establish a mandate for industry change and further meetings are scheduled in the North Island.

At a recent meeting in Feilding, attended by about 700 farmers, Alliance Group chairman Owen Poole said the industry was developing an improved model and and a decision on whether it would go ahead could be expected within two months, Farmers Weekly reported.

Mr Poole said it was further advanced than MIE's proposal, which had six principles, including up to 80% of red meat being processed and marketed by one ''coalition of the willing'' structure.

Mr Young said MIE fully supported any meat company initiative between companies.

Mr Poole's comments at the Feilding meeting suggested it was not a long-term solution but a starting point from which further change could take place, Mr Young said.

He emphasised farmers must focus on long-term sustainable change in the industry and needed to be aware that might take five years to achieve.

''We need to survive the next 2013-14 season, retaining farm ownership and control, and hopefully this meat company initiative will help,'' he said.

MIE also welcomed Beef and Lamb New Zealand chairman Mike Petersen's contribution to the debate, with the suggestion that tradeable slaughter rights could deliver the behavioural change required to get the industry ''functioning better''.

All options needed to be considered, but the industry needed innovative long-term solutions for it to prosper and grow, Mr Young said.

In a recent update to suppliers, Silver Fern Farms chief executive Keith Cooper said the problems were broad and the solutions very challenging.

Some of the ''moving parts'' were

ownership models (farmers, overseas ownership, private ownership and a combination of those),

reliance on bank debt funding (at peak probably more than $2 billion) and no certainty of supply.

The solutions lay with the owners of the businesses. They knew their balance sheets best, they had the relationship with their financiers, they were accountable to their shareholders and must take account of farmer suppliers, he said.

Reform could not be a ''political football'' as it was becoming. It was not the domain of Beef and Lamb New Zealand, as a ''farmer-good organisation''. It

did not have visibility of all the issues, nor did it have relationships with stakeholders.

The solution must be comprehensive, not piecemeal; it must be sustainable and, most importantly, must create value, Mr Cooper said.

Part of the solution must also be about creating ''a true meat industry organisation'' that embraced farmers, processors, exporters, marketers and customer interface.

Silver Fern Farms was playing a role and would continue to do so, advising of progress ''as and when appropriate'', Mr Cooper said. MIE meetings were planned for Gisborne on May 15 and Te Kuiti on May 17, as a nationwide mandate for change was sought.


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