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New face in farming leadership

Rural News
New face in farming leadership

A Nuffield Scholar, Mr Parsons advocates sweeping reforms to ensure meat and wool producers receive their fair share of returns reports The Taranaki Daily news. There are too many people extracting profit from a lengthy supply chain, he says, and the farmer, as the least consolidated, receives the lowest margin. "Retailers have been consolidating at an exponential rate and full marks to them. I'm not out there retail bashing. You have to take your hats off to these guys: they have been incredibly aggressive and they play the capitalism game very well. We haven't been. We've been sitting on our hands."What are we doing in NZ ? "Many times, there is a lot of trading that goes on within a supply chain. A breeder will sell through an agent to a trader, who will sell through an agent to a finisher. The product then goes to maybe a works agent, then on to a processor/importer and on further to a category manager. If it's primal beef cuts coming into the market, these guys will break it down to retail-ready and then sell on to the retailer."Each of the chain partners takes their margin and there is no communication through that supply chain."This chain is built on a system of buy low, sell high. "The system determines the culture and that's one of my key quotes: The incentives in this system are not to communicate. If I am a hill country breeder and I want to sell some weaner calves to someone who wants to trade them and that person has a good outlet for them and can get a premium, he is not going to tell me what he is getting. "What do we have in our industry? We have a culture of mistrust and individualism."The meat and wool sector desperately needs to consolidate. "There is a battle going on all over the globe revolving around who controls the power in the supply chain. "Whoever controls the power over the supply chain calls the tune. First of all, they tend to be the biggest and most consolidated within that chain. And secondly, they wear the crown of being the price maker over that chain. They will extract the biggest slice of the pie and in order of consolidation, the other supply chain partners will take their slice. Whenever you get consolidation, there is a shift in power within the supply chain.

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