Every vote counts

Ballot box

IN JUST a few days the 2014 election campaign will be over and then will start the process of forming a new government. Depending on which parties get what number of votes this could be a simple or a drawn-out process.

This has been the most bizarre election campaign in 50 years, memorable for lacking serious debate on issues of real importance to New Zealanders. Instead, day after day, our television screens and newspapers have been full of the latest silly little scandals, while issues of substance were ignored.

Hopes were for true debate on serious issues such as science funding for agriculture, for meaningful rather than trivial debate on environmental issues, and for voters to get good information on which to base their decision on election day.

For farmers there are some choices: to live with National’s essentially status quo model with some minor changes around the fringes. Labour’s capital gains tax has implications for the sector and could be a match winner or loser. The Greens predictably have never deviated from their stance to impose more restrictions and costs on farmers. For them the cow is the cause of the problem, not the saviour of the economy.

In the past, the differences between National and Labour from a farmer’s perspective have been minor. But Labour cuddling up to the Greens represents a complete paradigm shift and has rightly or wrongly made many people in the agribusiness sector nervous. It’s also fair to say that over the years, agriculture’s power base has declined as New Zealand becomes a much more urbanised society and the general understanding of farming in the cities has diminished.

Whichever parties get into power, it’s important they don’t erect unnecessary and unrealistic roadblocks in the way of agriculture. While things might not be perfect now, there is huge potential for things to get a lot worse. It’s hard enough for farmers to battle the vagaries and volatility of global markets without having to battle their own political masters to make a crust and keep the New Zealand economy viable and vibrant.

Smart Move!

DairyshedFONTERRA’S PLANS to team up with Chinese infant food manufacturer Beingmate and form a global partnership to chase China’s ever-growing demand for infant formula is a smart move.

China truly is an Asian tiger whose hunger for dairy produce is unlikely ever to be sated. It is a clever strategic move by the co-op to team up with a Chinese partner to tackle this lucrative market.
The partnership will create an integrated global supply chain from the farmgate direct to China’s consumers, using Fonterra’s milk pools and plants in New Zealand, Australia, and Europe.
Fonterra claims this partnership will increase the volume and value of its ingredients and branded products exported to China.  The proposal will see Fonterra and Beingmate set up a joint venture to buy Fonterra’s Darnum plant in Australia and make a distribution agreement to sell Fonterra’s Anmum brand in China.

Fonterra chief executive Theo Spierings describes the new partnership as a “game changer” that will provide a direct line into the infant formula market in China – the world’s biggest growth story in paediatric nutrition.

The term ‘game changer’ is used too often these days in referring to political announcements, sporting analogies, business and so on. But in this case it is appropriate, especially if the joint venture succeeds in promoting NZ dairy products as leading in quality and safety standards in China.

The lesson from last year’s botulism botch-up, and the San Lu disaster in 2008, is that Fonterra and New Zealand cannot afford damage to its reputation for providing high-quality, world-leading infant formula to the Chinese market. Hard-fought markets and value can be destroyed overnight.

China is our number-one market and this venture with Beingmate will be important in helping Fonterra drive volume and value and in stepping forward as a globally relevant co-operative.

As Spierings says, “The partnership with Beingmate will show the benefits of an integrated and secure supply chain where we are fast-tracking investment in milk processing capacity to meet global demand.”