Remember when, 2008: No Mexican standoff PLEASE

This series of articles looks back at the previous attempt to fix the problems facing the meat industry.

In 2008, the Meat Industry Action Group managed to get meat companies talking and get farmers active. Despite this nothing came of their efforts.

This series may just act as a reminder of what we as farmers have all heard before…

24 March 2008 — Murmurs of animosity and past rivalries between the co-operatives have Natural Producers Chairman Murray Rohloff concerned that the Mega-Merger negotiations are heading toward a Mexican Stand-Off.

Mr Rohloff, who farms at Tuturau, said NPC would lobby for farmers’ best interests during the consolidation process but right now the biggest threat to progress is the relationship between Alliance Group Ltd and PPCS Ltd.

“Mergers need to be built on personal ties, goodwill and mutual understanding. The two co-operatives need to get over past histories and quit the present muscle-flexing mentality”.

NPC would like to see the Directors reach out to each other to build commercial and personal ties between the co-operatives.

“Farmers need the leadership of our Directors at this time as without it the merger cannot succeed. Aside from this NPC sees several other issues as being vital in any new consolidated entity and are prepared to make sure that farmer interests and co-operative principles are adhered to.

“At NPC we believe that farmer shareholdings and commitment of capital should be on a per volume of committed supply, not on a per farm basis.

“And, farmers who commit fewer assets to the new entity (e.g. current Affco and Anzco suppliers) should be encouraged to join, and to receive attractive financing arrangements to ease the cost of their purchase of shares.”

Mr Rohloff says that a higher percentage farmer-owned entity is better than a lower option and it is interesting to note that a recent poll run on Farmnews indicated that most farmers were also in favour of high farmer ownership.

“In fact, farmers are better to contribute cash themselves, and to see debt in the company, rather than introduce outside capital.”

Mr Rohloff said another option, bearing in mind the private interests that are likely to be involved in the consolidation, would be to set up the new co-operative in such a way as to allow farmers to later buy out any private sector minorities and eventually regain 100% control.

And, once supply commitment goals have been achieved the value of the shares should increase and become an asset to farmers. This asset would also ensure committed supply – a far cry from the $1 shares we have now, he said.

“It is also important that those involved in the consolidation process remember that farmers want fairness and transparency in their co-operatives. As already shown by events at recent AGMs, farmers don’t just want this, they demand it.”

Category: News