MIE's future direction in the air
The future direction, and possibly even the future, of the Meat Industry Excellence reform group will go on the agenda in an executive meeting tonight.
The approval by farmer shareholders for Silver Fern Farms (SFF) to partner with Chinese company Shanghai Maling appears to have taken the stuffing out of MIE's plan to encourage SFF and the Alliance Group to form a stronger co-operative.
While the joint venture has a few more hoops to go through, including Overseas Investment Office approval, the clear cut nature of the voting result by 6200 SFF shareholders - 82.2 per cent in favour after a 67 per cent turnout - would seem to indicate the $261 million of Chinese investment had more support than co-operative options. Shanghai Maling has offered to inject this sum into SFF, in a deal that will see the Chinese company share ownership with farmers.
MIE former chairman John McCarthy said the executive would meet tonight to explore options and see if it had the appetite to carry on with reform work.
The group would also make a more defined statement about its "Newco" proposal, he said.
He said it was disappointing the group never got the chance to put its proposal up as an alternative for farmers because of the turn of events with the Shanghai Maling proposal.
McCarthy said the Shanghai Maling joint venture should not be considered as a foregone conclusion as the OIO process had to be followed.
He said it was up to the MIE executive to decide what further options lay ahead for the group.
MIE's Newco plan was to create a new co-operative, owned by supplier shareholders and ultimately providing the vehicle for the amalgamation of SFF and Alliance. Newco would have insisted on committed livestock supply from farmers and was expected to have enough scale to improve farmer returns.
Whether the group continues to run with this plan in some form or shape remains to be seen.
MIE said the group was disappointed with the SFF/Shanghai Maling voting result in a statement over the weekend, believing it exposed SFF and the entire co-operative model to the risk of losing farmer control.
The group reinforced its belief that a combined farmer-controlled co-operative was the only way to secure future profitability. For this to go ahead, farmers needed to initiate the changes, but this had not been the case and Shanghai Maling was expected to drive changes to benefit China.
"Our biggest frustration is that a conversation by the leadership groups of both co-operatives around a shared farmer controlled future never eventuated," said the statement by MIE's leadership team. " We lacked any form of decisive strong leadership for shareholders by their respective chairs to rally in behind. We waited a generation for a conversation that has not happened."
MIE leaders said they would let the emotion of the decision settle before consulting with supporters to decide whether there was an opportunity to progress the goal of a farmer owned and controlled combined processing and marketing entity.