Meat unity needs impetus

26-07-2010 | Annette Scott

The meat industry lost its best opportunity for reform through a lack of commitment says former PPCS chairman Reese Hart.

Almost three years on since Hart lost his director position at a time when low returns saw farmers desperate for change the South Canterbury farmer has broken his silence.

"I have no vested interest.

"I have no intention of getting back into the meat industry.

"But I am happy to give encouragement," Hart told The New Zealand Farmers Weekly.

As he reflects on his 22 years as a PPCS (now Silver Fern Farms) director, two of those as chairman, he sees the industry still facing the same challenges - overcapacity, undisciplined procurement policies and a marketing structure that is in need of reform.

That said, he acknowledged that some companies have made progress in linking suppliers direct to the marketplace.

"But the industry as a whole needs to have another look at how it operates otherwise we won't have an industry going forward."

Hart stressed that doing nothing is not an option.

The industry needs to revisit a reform and this reform needs to be driven by the farmers - new fresh blood with long-term commitment and no side tracking.

Hart suggested the meat companies were as far apart now as they have ever been.

"They come across frostier now than ever.

"They need to find trust and goodwill among themselves.

"They need to gain farmer confidence to go forward.

"They can have as many strategies as they like but to be able to run these strategies they need a production base and the bottom line is that base is the farmers, without them they have no business."

Hart appealed for people to come forward, people who have a long-term commitment to realise the vision.

"The industry needs a new group of guys.

"The MIAG group meant well, they had a lot of enthusiasm, they had the revolution but they failed to deliver the reform.

"They lacked the plan and the long-term commitment and it is disappointing they dropped the ball because I believe that was the best shot."

Hart said when he first became chairman of (then) PPCS he had spent some time studying the dairy industry throughout the world and found NZ dairy farmers enjoyed relative prosperity compared to their overseas counterparts, particularly those in Britain.

It wasn't hard to come to the conclusion that the Fonterra structure set the NZ dairy industry apart in being able to deliver a viable return to its suppliers.

"I became convinced that we should investigate this model or something similar for the NZ meat industry.

"My first step as chairman was to approach long time friend John Turner, chairman of the Alliance Group, with a proposal to merge the two co-operatives.

"While the merger proposal had its flaws it was a useful starting point for industry reform."

Over many months the merger discussions were on again, off again but eventually led to Owen Poole's Industry Concept that later became a Meat Industry Super Co-operative proposal incorporating 80% plus of the industry.

Throughout this time Hart said he found Turner and Poole very good to deal with.

"We had our disagreements but on the whole the channels of communications stayed open and negotiations were conducted with a spirit of goodwill and co-operation.

"We felt that we had reached a milestone when we received enough support in principle from other participants in the industry to begin negotiations to form a Super Co-operative."

Crucially, Hart claims the MIAG campaign destabilised those who were driving the reform proposal but despite his disappointment he was always hopeful that those who replaced himself and Turner would continue the reform process that had been started.

It wasn't to be and over time the Super Co-operative proposal collapsed with many farmers seeing it as an opportunity lost, one that will be difficult to resurrect.

But Hart believes the industry can still unite.

"It will be more difficult now.

"The best opportunity has been lost through lack of planning and commitment.

"It is still possible but it will take more time and more commitment."

With a predicted 21 million sheepmeat kill for the coming season Hart points out the NZ meat processing capacity at 26 million is "overkill" as he predicts the livestock kill total in the foreseeable future will drop to a mere 16 million.

"With a lot more trees going in to offset emissions harvesting carbon credits could well become more profitable than livestock. ETS is a regime that has certainly not helped the meat industry."

Meantime sheep and beef farmers in the coming season will have time to reflect on what might have been as they watch neighbouring dairy farmer incomes driven to higher levels under the Fonterra structure.

"It is my wish that out of all of this a new group of farmers will emerge who have the determination and commitment to form an industry structure that has the clout and ability to deliver a profitable future for all sheep and beef farmers," Hart said.

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