Federated Farmers has started consultation among its membership covering reform of New Zealand’s $6 billion red meat industry (or $8 billion according to the Red Meat Sector Strategy) – equivalent to around 35 annual Avatar movies to the New Zealand economy.
“Given Avatar Director James Cameron is also a Wairarapa farmer, reform of New Zealand’s red meat industry represents our economic blockbuster if we can pull it off,” says Jeanette Maxwell, Federated Farmers Meat & Fibre spokesperson.
The Meat Options paper will be released in the New Year, but first, Federated Farmers wants its members to have a decent chance to talk things over, she says.
“We are asking them to give us their feedback so that Federated Farmers Meat & Fibre can write its strategy. Everything we do will be informed by what our members want. Our options paper advances three broad options but the solutions within them are more like a ‘pick and mix’.”
Arguably, the Processor-Focused options will generate much discussion.
“There is a push by some in the industry to merge the co-operatives, something that’s much easier said than done. If the thinking is ‘just copy Fonterra’ then it will not succeed. To work, any merger needs a reassessment of the entire industry but especially its capital structures.”
- Tradeable Processing (Slaughter) Rights – similar in concept to fisheries quota management, which could help to reduce over-capacity in the industry.
- Toll Processing – which separates out processing and marketing.
- Total Value Transparency – based on the Uruguayan model which is widely regarded as having the best meat information systems in the world, says Maxwell.
“We feel total value transparency merits discussion as it could drive a material change in behaviours at the marketing end. It is one means to improve co-ordination, collaboration and in-market behaviour while generating value and demonstrating where that value is being added.
The Behaviour-Focused option reflects that the dairy industry was static until the industry, from the grassroots up, decisively reshaped it for the better.
“It is about behavioural change to shift the focus from procurement to what the market wants. This involves a matching of suppliers with companies that share similar philosophies,” says Maxwell.
“We know from our research that there is a mutual cultural and business alignment to be built upon here. “We also explore the positive role stock-agents could play, a very different outlook on them than what others have reached.
The third section discusses Marketing-Focused options. We look at things that are being discussed in the industry right now, from the WTO-unfriendly single desk model to more realistic in-market collaboration by our exporters.
“Being marketing-focused could include multiple marketing companies involving strong producer and customer/consumer relationships. This option is dependent upon toll processing indicating how interrelated our options are.
“A twist on market collaboration is for an ANZAC approach, where Australia and New Zealand unite to achieve greater scale while improving research investment and market development.
“Going larger still, we could see an alignment between the Northern and Southern hemispheres to match seasonality of supply. This could help to keep red meat products on the shelves in the face of competing proteins.
“While not an option, I need to mention how water storage and irrigation could be transformational. The current debate is too dairy-centric and if we want a globally competitive red meat industry then we need reliable water to reshape our farm businesses.
“It is now up to farmers and what they want our industry to look like in five, 10 and 20 years time? If we genuinely believe it is time for a change, then change will happen,” Maxwell concludes.