17 Mar 2015

Govt to wait for cooperative farmer plan

1:51 pm on 17 March 2015

The Government says it will wait for the red meat industry to approach it with a solid plan before it gives any support to a single farmer cooperative.

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Photo: RNZ

A new report by the Meat Industry Excellence Group is the latest in a long line of reports calling for better collaboration in the meat industry.

Chair John McCarthy said a single cooperative similar to Fonterra was the only way forward.

He said for the meat industry to match the success of the dairying sector, the country's two largest sheep and beef co-operatives, Silver Fern Farms and Alliance Group, needed to merge.

"A strong red meat sector is in the national interest. It's not just in the farmers' interest. It is economic suicide, and environmental suicide, to have all our eggs in one basket, specifically dairy.

"Wouldn't it be great to have a flagship model, in terms of our export of protein overseas that rivaled dairy. We don't want to become one big dairy farm."

Head of Alliance Group Murray Taggart rejected suggestions the industry was at crisis point, but admitted it could do better.

He said it would be considering the report's findings.

"If it stacks up commercially, whether it is with Silver Fern or any other company, then you can rest assured that we will be looking at it and persuing it with a fair bit of vigour."

Nathan Guy

Nathan Guy Photo: RNZ / Alexander Robertson

Primary Industries Minister Nathan Guy said a Fonterra-like structure could work.

"I've always said that my door is always open if there is a clear coherent plan going forward.

"And I can't see one that's joined up with farmers and processors at this point and time. This will be an important catylst to perhaps drive some momentum. I don't think this will happen fast."

Mr Guy said any merger would have to have the overwhelming support of farmers and processors.

The Labour Party said it was not good enough for the Government to wait for the red meat industry to come up with a plan to make drastic changes to its structure.

Primary industries spokesperson Damien O'Connor said farmers needed the Government to lead the structural change.

"It's a big ask to shift from where they are to a Fonterra, but there has to be better coordination. And if the government doesn't take the wisdom in this report and lead by action, then it's letting New Zealand down."

He said there was a long list of inefficiencies highlighted in the report that a single cooperative would address.

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