By Andrew Hoggard*
In case you were expecting Willy Leferink this week, there has been a bit of a change at Federated Farmers.
What I can relay to you is my reaction to the politicians who pitched up at Federated Farmers’ recent National Conference.
One common theme which annoyed me and the farmers around me was this notion that New Zealand is doing the wrong thing in the marketing of its agricultural products.
That we are not adding value and are just doing cheap and nasty commodity products thanks to industrial farming practices.
Oh and the primary industries are like putting all of our economic eggs in one basket. Now where have I heard that before?
Firstly, this view that the marketing of agricultural products is somehow the domain of political parties is just wrong.
When deciding on the stocking rate for my farm, I sought out the advice of my farm consultant, accountant and banker and not my MP.
If it is politicians making decisions about what products Fonterra makes and sells, then what on earth are Fonterra shareholders like me paying those highly paid executives for?
Government is meant to be there to assist with market access and to make sure the rules are played by. It is a bit like the referee on the rugby field but some politicians want to captain the team as well.
Farmers like me hope they will have fiscal policies which don’t drive up inflation and that instead of trying to takeover the industry, they instead stick to making sensible regulations.
The management and the owners of agricultural businesses are the ones who make the big decisions and they don’t make them based on some nudge-nudge wink-wink from a politician.
They make them based on long-held knowledge of markets and products and because it makes sense.
If you want a reason for why used car salesmen are far more trusted than these wannabe political dairy barons just look at Fonterra.
According to politicians, Fonterra’s strategy is “let’s make heaps of cheap crap.” Actually, it is the complete opposite but hey, don’t let the facts get in the way of theory.
At the last strategy update for suppliers, Fonterra’s Chief Executive, Theo Spierings, message was all about ‘turning the value wheel.’ This means increasing the amount of value add products. Now these products may still be viewed as commodity products but there is a big value difference between a premium brand commodity and one that isn’t.
It doesn’t surprise me that these various politicians and self-appointed experts don’t comprehend this. This is Fonterra’s strategy but I guess they choose to ignore it because it doesn’t fit into their theoretical narrative.
The other thing with this narrative that annoys me is that it implies the country is investing everything into the Dairy Industry forsaking everything else. That nothing else in the New Zealand economy can progress because Dairy is hogging every resource.
Less than 12,000 dairy farmers are certainly putting their all in but that shouldn’t stop the remaining 4.49 million kiwis from doing what they want to do.
The Dairy Industry isn’t stopping any other industry or business from succeeding.
In fact we welcome it.
New Zealand has a competitive advantage in Dairy since we have that ideal mixture of rain, good temperature and even better people.
Put this together and you create a world beating industry. Given the need for technology on-farm these days, there is no reason why our industry cannot be the launching pad for numerous tech companies.
This shouldn’t be a question of the “Dairy Industry” OR “something else”, it should be the “Dairy Industry” AND lots of others.
This does all raise the question about what our leading agricultural companies and co-operatives are doing in explaining their strategies and vision to a much wider audience. Hell, Federated Farmers cannot do it alone.
More importantly, what it all means to a supermarket operator in Mangere or a ballet dancer in Wellington. Judging by what we heard from the politicians recently, it is quite clear that more needs to be done.
Getting the public fully on our side will also help shift those politicians away from trying to play the game back to reffing it instead.
Andrew Hoggard is Federated Farmers new Dairy Industry Group chairperson, replacing Willy Leferink