$8 billion to help provinces catch 'a big fish'

South Waikato mayor Neil Sinclair likens growing the economy of a rural region to deep sea fishing: "You have your line, your hooks and your bait and you just hope you can catch something other than nibbles."
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Unless a region has a magnet like the brand new Fonterra milk powder plant in Lichfield.
The $360m giant plant – along with Fonterra’s Darfield – is the biggest in the world, churning out over 700 tonnes of milk powder a day.
It has created 70 jobs, taking the Lichfield staff (it already has a cheese plant) numbers to 230 – with over 3000 people and 300 companies working to establish the plant and clearly boosting the South Waikato economy. It is part of the $8 billion the dairy industry ploughs back into rural communities every year.
Sinclair has no doubts it has played a major role in the rejuvenation of the area (main towns, Tokoroa, Putaruru and Tirau): «I am now fielding inquiries from other businesses who are considering coming here. There’s nothing major to talk about yet but previously we were not getting as many inquiries.
«There are other factors – with the Hamilton bypass, we are the first stop after you leave Auckland and the last stop before you get to Auckland after leaving Waiouru. That demonstrates our central position – and so does the fact Fonterra are looking at reinstituting the railway siding at Putaruru.»
The siding had fallen into disuse but could be brought back to life to transport much of the 40,000 tonnes of export quality milk powder out of the plant’s enormous holding store.
«There is no question this has a big effect on our rejuvenation,» Sinclair says. «There are now plans in the region to begin residential subdivisions – and if you’d said that to me three years ago, I would’ve laughed at you.»
That $8 billion doesn’t just stem from new plants by Fonterra. Even in times of reduced milk prices, farmers’ revenues flow into other businesses in rural communities.
Farm Source chief operating officer Miles Hurrell says a recent study by Lincoln University suggests, for every dollar earned by farmers, 50c of it is typically spent in the local community: «I don’t think it is overstating the fact to say many rural communities would be direly affected if that money did not flow through.»
«At about 7 per cent of New Zealand’s GDP, dairy’s contribution is greater than that of the fishing, forestry and mining sectors combined and 10 times that of the wine sector. Each of these productive primary sectors helps us earn our way in the world, but take away dairy and New Zealand would be a very different place.»
Tararua mayor Roly Ellis says the $8 billion put back into New Zealand’s rural and provincial communities by Fonterra becomes most obvious when times get tough.
«Two years ago, we saw it happen – everything just went ‘bang’ and farmers just shut their wallets. That showed the effect on the community – shops and all the businesses that depend on farmers did it pretty hard. They were fighting for survival and quite a few closed down.
«The farmers are still spending – but not as freely as in the good times, of course. Now we are just starting to get things right again. I’d say we are about 90 per cent back to the numbers of shops and businesses we had before.»
Hurrell says Farm Source’s 71 stores up and down New Zealand offer a huge range of everyday farm goods and are ideally placed to see farmer spending in action.
«I’d say farmers are spending less but they are spending more wisely,» he says. «Most of the things we sell through our retail are almost necessities for dairy farmers – things like detergents and rubberware are non-negotiable, for instance – and they are seeking discounts at point of sale.»
Farmers were also taking advantage of Farm Source rewards to bring down the cost of farm supplies and services while Farm Source, as part of the co-operative set-up, is returning to loyal farmers a share of profits from Farm Source hubs.
Source: NZ Herald
Link: http://www.nzherald.co.nz/sponsored-stories/news/article.cfm?c_id=1504051&objectid=11712552

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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