That’s the call from dairy farmers and Fonterra shareholders Mark and Devon Slee, who last year went on a study tour to the UK, Ireland and the Netherlands after winning the Ballance Farm Environment Awards.
Their tour and subsequent report to the Ministry for Primary Industries – and appearance before Parliament’s primary production select committee – centred around the strengths and weaknesses of competing dairy industries.
The Slees’ farm, Melrose Dairy Limited, covers over 1000 hectares near Ashburton and milks over 2600 cows on three dairy units. They focus on economic, social and environmental performance.
Since their tour, Britain’s exit from the European Union seems poised to change the economic landscape though Mark Slee says it is difficult to gauge potential effects: «No one really knows what is happening yet – though there could be a threat to New Zealand.
«It may not be a great impact but clearly Brexit could affect the UK’s ability to trade with Europe – there won’t be any easy deals there now. That could have a potential impact on us even though the bulk of the UK’s milk supplies the domestic market.’
Ireland was perhaps a greater threat – though their eyes were focused on major emerging markets like China rather than Europe.
«One thing is clear – we have to stick to our co-op structure. The great thing about being in a co-op is farmers are both shareholders as well as suppliers. There is enormous strength in having 10,000 farmer families who own it.»
An Irish farmer who had studied New Zealand methods told Slee that, if it wasn’t for the likes of Fonterra, New Zealand farmers would get paid a lot less on a long-term basis.
Returns under the current co-op structure also flow back into New Zealand’s rural and provincial towns, says Slee – to the retailers, garages, farm-related industries and many others. That would be damaged if the system changed.
«All you have to do is to look at the UK and see what happened after deregulation – when the big publicly listed corporates got in there and weakened the co-ops,» Slee says. «They want to keep as much of the returns as they can for their shareholders.
«Farmers just became suppliers and, over time, it completely changed things. In the UK now, the supermarkets control milk supply. But, with the effects of the strong competition in the domestic market over there, the price went down and some farmers were not making enough money; some went to the wall.»
«I think more New Zealand farmers have to recognise the strengths of the co-op,» he says. «New farmers coming through need to understand and embrace the co-op principles as I think they are slowly getting eroded away.»
Fonterra, too, needed to ensure it maintained progress in the face of competition from large overseas corporates: «They need to be better than – or at least as good as – a listed company, adjusting themselves for the 21st century and constantly modernising and adjusting operations.»
In post-deregulation UK, there had been a consumer backlash. British consumers knew the advantages in industries like tourism in having good-looking, healthy farms and farmers. There were longstanding traditions and regard for the land and its uses – including walking, hunting and other pursuits plus an extremely active environmental and animal welfare lobby.
«When the milk price got down to $1 a litre, there was a public backlash. We went into one supermarket in the middle of London and noticed that, on the milk bottles, ‘We pay a fair price for this milk’ was printed on it.
«We were also told by a cabbie she paid more to buy organic milk because, due to the cheap price, she did not believe that what was being sold as milk was actually milk…»
That same environmental focus was behind a consumer-led push in Europe to see cows grazing outside, rather than being farmed intensively in barns.
«In New Zealand, we have a temperate climate, great soil and good grass which the cows can eat themselves and walk happily to milking by themselves and walk back,» says Slee, adding that the ‘free range’ element earned a premium in places like Europe.
«We have some environmental issues we are addressing but by and large we are very lucky.»
Source: NZHerald
Link: http://www.nzherald.co.nz/fonterra/news/article.cfm?c_id=1504051&objectid=11700631