Red meat reforms loom large

18:45, Jan 06 2014
Red meat industry.
BONE OF CONTENTION: The debate over meat-industry reform will be one of the major issues for farmers this year.

2014 is set to be a pivotal year for the country's red-meat farmers as they mull over options to reform the $6 billion industry.

The boards of the country's two biggest meat co-operatives, Silver Fern Farms and Alliance Group, received a clear message of the need to reform the industry when farmers elected reform- minded representatives to their boards late last year.

Gore farmers Don Morrison and Richard Young were elected to the Alliance and SFF boards and Dan Jex-Blake from Gisborne was also elected to the SFF board. These farmer-elected directors have provided their supporters with hope that change will occur to reverse low returns.

The trio were all leaders of the Meat Industry Excellence (MIE) reform group.

Federated Farmers recently entered into the debate by releasing a paper to its members, which outlined industry reform options to farmers in processing, behaviour focus, and marketing.

Meat and fibre spokeswoman Jeanette Maxwell said it would be a "massive year" for the red-meat and wool industries.


"As red-meat industry revenues are worth around 35 Avatar movies each year and generate some 80 times the annual revenue of Xero - you can say its future is fairly important to every Kiwi."

It canvassed issues such as a Fonterra model and toll processing, which separated processing and marketing within the industry.

The paper also included tradeable processing rights, which is a system similar to what is used in the fishing industry, and an Anzac approach for marketing and research.

Maxwell said they were seeking feedback on the paper from their members so the organisation could write a strategy in which reform would be central.

Other big farming issues this year include RMA reform, the continuing debate over freshwater policy and the general election later this year.

The proposals to reform the National Policy Statement for Freshwater Management by giving local communities more power would hopefully improve discussions around freshwater policy, Federated Farmers president Bruce Wills said.

"Water quality and quantity are absolutely vital to the two E's - the economy and the environment. These are not mutually exclusive things but are flipsides of the same coin.

"Water storage is also vital to meet the challenges posed by climate change while enhancing land and water quality."

Waikato University professor of agribusiness, Jacqueline Rowarth, predicted 2014 would be a huge year for compliance as more regional council plans took shape around the country.

Rowarth said the biggest challenge for farmers this year was reducing the growing disconnect between rural and urban populations.

"The challenge for farmers is to get society to understand how they are operating their businesses."

This went hand in hand with the country's poor understanding of science in the economy.

Rowarth hoped the new year would see a greater level of understanding of the importance of dairying to the New Zealand economy and the wider implications if limits were placed on dairy expansion.

Wairarapa sheep and beef land was earning $643 per hectare three years ago. Rowarth said that same land would earn $2500 per hectare if it was converted to dairying. "It's just economics."

She agreed with Fish & Game chief executive Bryce Johnson's statement in December that freshwater quality would be a major issue during the general election later this year.

While Fish & Game's "dirty dairying" slogan was one of the most successful in New Zealand, Rowarth questioned if that campaign was helping farmers to do a better job to improve their environmental record.

"The answer to that is 'no' because our children wish to be regarded highly, they don't wish to go into an area that is regarded poorly by society."

Federated Farmers Waikato provincial president James Houghton saw this year's general election as an important one for farmers.

It concerned him that some of the policies being promoted by some politicians were being formed to win the maximum number of votes, rather than for the common good of the country.

"They could have a negative detrimental impact on the New Zealand economy."

Houghton was also a member of the recently formed Collaborative Stakeholders Group (CSG). This group is involved in making recommendations to the Waikato Regional Council and river iwi partners on a regional plan change for the Waikato and Waipa rivers.

That change would involve limits and targets for land-based activities so as to protect the health of the two rivers.

Working through that process would be a real challenge in 2014, Houghton said.

He believed there was a good level of industry confidence at the moment, but finding good farm labour would continue to be an issue for the industry over the next five years.

New Zealand Beef + Lamb chairman elect James Parsons saw water quality and environmental policies such as the Emissions Trading Scheme as potentially big issues for farmers in 2014.

"Depending on the election policies of the main parties, I believe farmers will support parties that have a sensible balance between the need to maintain the pristine environment we have here in New Zealand and the ability for farmers to have a sustainable business at the same time and contribute to New Zealand's export revenue and standard of living."

Primary Industries Minister Nathan Guy said farmers could look to 2014 with confidence.

"2014 is looking very exciting. The rural economy has rebounded strongly from the drought with favourable growing conditions since then. Dairy prices and demand are booming, and meat prices look strong."

Although China was now New Zealand's biggest export market, other trade negotiations were under way that could open up new markets for producers, Guy said.

"In the wider economy, all the indicators are pointing the right direction. Business confidence is at record highs, the government books will be back in surplus again and we will have one of the fastest growth rates in the Western world."

Waikato Times