He has advised a number of Maori boards on treaty claims and development. He said Maori land interests were in a third phase of their relationship with productive land, one of “new entrepreneurs”.
This came after the 20th century’s more ambivalent relationship, often dominated by a well-meaning but constraining State.
That had come after an earlier period of entrepreneurship through the 19th century, when Maori owned ships, grew a variety of crops, and traded as far afield as Australia.
While dairying was the big story in land use today, Scrimgeour cautioned things could change.
Wool was number one 50 years ago and meat was king only 30 years ago, he said.
“We should not just assume that what is big today will be the same tomorrow.”
While Maori land tended to have a higher proportion of less-productive country, with 1.5 million hectares under operation, the sheer scale provided plenty of options for investment and advancement, he said.
Given much of the land was in Bay of Plenty-Waikato, also close to large population bases, options increased and urban Maori investments might provide money to aid rural development.
Investment
However, as farm numbers concentrated and scale grew, the investment necessary in human capability also grew, Scrimgeour said.
He pointed to the profit variation that arose between a well-run, average-sized dairy unit, netting $214,000 profit a year, against an average-run operation netting only $109,000 a year.
“So a 5% improvement across all Maori operations brings a huge difference in profits and therefore returns to shareholders. But to say ‘we want to increase profit by 5%’ is not a very compelling argument. You need more.”
There needed to be an element of “I have a dream” to inspire shareholders, but the goals also needed to be multidimensional and not just about money, he said.
They also needed to be owned by the shareholders in iwi groups and they needed to be given direction.
“This is where hard heads and soft hearts need to come into play to keep it realistic.”
He outlined some ground-up strategies to help iwi achieve this.
The first was to lift farm-management skills, getting the right people involved. The challenge for iwi was made greater by the recruitment of bright young Maori graduates in professional occupations.
Governance level
At a governance level the appointment of good directors was also a challenge, and getting selection processes and criteria right for key roles, including chief executives, was important.
“They need to be clear on the context and process before such decisions are made.”
This included those in governance not treating farming as simply another business and required an appreciation of its biological nature, he said.
Managing possible conflicts of interest was also big for iwi groups and clear paths to avoid that had to be established early.
While it was often accepted that large-scale operations delivered better returns and economies of scale, Scrimgeour said it was not always the case.
He pointed to Landcorp delivering a return on equity consistently below that of owner-operated farms on all but two years in the past decade.
“But there are opportunities there for iwi to amalgamate and integrate blocks. If I was involved with larger corporations I would look to do some deals with Landcorp and other big land owners, where land swaps or leases can be done.”
Given the scale of land available, diversification was also an appealing option for some iwi, he said.
“Given the impact of Psa the corporations I deal with are very happy at present they have diversification of their kiwifruit with dairy land.”
Scrimgeour was optimistic the practical and technological challenges facing Maori land owners could be overcome.
“The risks are largely social and political that often need to be addressed.”
