Comment: Collaboration continuum

Mick CalderThis could be construed as shutting the stable door after the horse is five furlongs down the track, he says, but Mick Calder has a couple of concerns about the ‘Collaboration for Sustainable Growth’ (CSG) programme in his latest blog post.

The programme received a symbolic seal of approval when farmers agreed in March that Beef + Lamb NZ (B+LNZ) could dip into reserve funds to contribute the producers’ share of the cost of the scheme.

The CSG is explained on the B+LNZ website as follows: “A group of agribusinesses and the government have partnered up to invest in a collaborative programme to drive sustainable, long-terms profits for New Zealand’s red meat sector. All partners plan to work together to support the adoption of best practice behind the farm gate, and between the farm and processor.”

My concerns are that in order to achieve ‘long term profits for the red meat sector’ all of the emphasis is on the producer end of the supply chain. The focus for improvement in productivity is still behind the farmgate with the presumption that farmers have been neglecting their duty to drive for profits in the red meat sector.

For my money, the farmers have done an amazing job of improving on-farm productivity and keeping the red meat sector going in the face of fluctuating weather conditions, inconsistent prices and returns, unfavourable exchange rates, opportunist selling activities and pressure from bankers and other advisors to convert to dairying or some other capital intensive pursuit. The inconsistency in wool returns and the demise of wool promotion and R&D have not helped, but that is another story.

Despite these adverse conditions, the productivity of the average sheep and beef farm has continued to improve, as shown by the 83 percent increase in the weight of lamb produced per ewe over the last 20 years. Admittedly sheep numbers have declined but that cannot be entirely related to unproductive farming practices.

In order to achieve the continuous increase in productivity, and despite the fact that they are all operating in a competitive environment, farmers have been quietly collaborating and sharing information on most aspects of best practice behind the farmgate.

Back in the day (as the saying goes these days) the Department of Agriculture used to employ sheep, wool and beef advisors to keep farmers up to date with developments in science and technology that would assist in improving productivity. In this age of self help and private enterprise these officers have gone the way of most Ministry for Primary Industries services.

Farmers have relied on their own resources, farm discussion groups, field days and just plain sharing of information, which has continued with or without assistance from government agencies. B+LNZ has been contributing as part of its farmer funded activities, using current income derived from levies, but now it is going to dip into the reserves.

In essence, the farmers have been getting on with information gathering and sharing to maintain a steady improvement in productivity for the past twenty years.

But now, the various meat companies and agribusiness groups associated with the PGP schemes have the temerity to propose that farmers spend some of their reserve fund, via B+LNZ, to encourage them to continue to get together to collaborate and share information to keep improving their productivity. It is as if the farmers are the root cause of the problems of the industry.

When did the meat companies or the banks last get together and share information to improve productivity? Will they be using reserve funds or current income to fund their contributions to the CSG?

The outstanding feature of the various PGP projects that have been announced so far is that they have been proposed by individual companies and there is a strong hint that any benefits derived will be held fairly close to the chest of the company at the centre of the particular scheme. The idea of information sharing to improve the productivity of the processing and marketing sectors is an anathema to them. Collaboration among processing companies has never been their strong suit.

While the four major meat companies claim they have been meeting to discuss possible structural changes for the future meat industry there is little evidence so far of them sharing any of this information with the other stakeholders involved – the farmers.

Farmers react to incentives and the best one is consistent pricing. Not the run away boom followed by three years of austerity while the companies and the banks recover from their excesses. So maybe there should be a move to encourage the companies to collaborate to improve their market intelligence and marketing efficiency.

Mick Calder says he’s a ‘generalist’ having started in agricultural science then marketing economics and trade policy, and finished in business management and administration, with elements of bookkeeping and legal drafting thrown in. His professional roles include former board secretary for the New Zealand Meat Board and later the NZ Lamb Company. He was co-author, with Janet Tyson, of Meat Acts, a history of the New Zealand meat industry from 1972 to 1997, which makes fascinating reading (Published 1999: ISBN: 0-9582052-2-1). He has written countless other reports, newsletters and articles for magazines and newspapers. He also maintains his own blog, Agriphile.

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