By mid-March it had just reached the half-million dollar mark and although organisers said farmers were supportive of the idea, so far they seemed reluctant to donate.
“I’m getting extremely positive feedback from farmers when I talk to them about the hub,” Southern Dairy Development Trust (SDDT) chair Matthew Richards said.
“They agree it is the way to go and it will be great for our region. We’ve just got to convert that sentiment to pledges of financial support.
“We only get one shot at getting this over the line with our industry partners.”
The April 30 deadline has been set by DairyNZ and AgResearch, who will each donate $5m to the 800-cow hub.
The $2m raised by farmers, with profits from the Southland Demonstration Farm, will give each group an equal shareholding.
As well as time running out for funding, buying a 300ha to 380ha farm in Central Southland and converting it before the lease of the Southland Demonstration Farm at Wallacetown, near Invercargill, finishes at the end of next season will also soon become an issue.
Farmers have questioned why they should pay for the hub twice – through the DairyNZ levy and by donating money – but Richards said for it to go ahead in Southland, southern farmers had to show their support.
“Both DairyNZ and AgResearch as industry partners are not prepared to build something that farmers aren’t interested in supporting and the best measure of this support is a one-off financial commitment,” he said.
“The scale of what we’re proposing requires an investment that is beyond DairyNZ alone. The additional capital is needed so that we have an equal third share in the venture and we can confidently demonstrate to farmers in other regions that we have financially contributed to it.”
At meetings throughout the south about the hub farmers have also questioned the level of debt the $26.5m project will have.
However, AgResearch’s Shane Devlin said there were processes in place to ensure debt was appropriately managed as well as additional revenue streams, excluding milk supply.
“DairyNZ has signalled its intent to fund at least $500,000 annually into research at the hub. The hub will also have some commercial lease income, other research and income from training providers like Primary ITO and Southland Institute of Technology. We are confident these income streams alongside the milk cheque will keep debt levels manageable,” Devlin said.
SDDT trustee Chris Withy said any profits would be invested in further research or activities that benefited southern dairying.
“There won’t be any dividends to industry partners.”
Hub farmer engagement support manager Jodi Tong addressed the Dairy Women’s Network conference in mid- March in Invercargill saying the hub would not just produce research relevant to Southland.
“All of New Zealand will benefit from this proposal. When we do comparative studies on lameness or do feeding trials it will not just be for southern NZ but for all of NZ,” she told the 350 conference attendees who were from throughout the country.
“We need people to donate, not just from Southland.”
Farmers can pledge their support using a variety of payment options either online at www.southerndairyhub.co.nz or by calling 0800 336 632.
