It’s surrounded by a 175ha dairy farm owned by a charitable company, Grafton Downs, and run by Steve and Andrea Mills who milk about 450 cows as 50:50 sharemilkers.
The Wesley College Trust Board and the Methodist Church’s PACT 2086 Trust each own half the Grafton Downs company shares. Combining two farms 12 years ago prompted the involvement of a number of local farmers who were asked to set up a governance structure.
One of them was Brian Gallagher, who farms at Pukekohe.
There’s a farm working group which provides advice as a management group, ultimately to the Grafton Downs Board. This group assists with the day-to-day decision-making on the farm and is chaired by Barry Shuker, who also sits on the board.
“Steve and Andrea really enjoy this team environment,” Gallagher told the New Zealand Future Farms Conference.
“Certainly from when we initiated our first meeting with them they have come a huge way.”
His experience with the college farm prompted Gallagher to consider running his family dairy farm on similar lines. The result was the establishment of a formal board. The governance structure was formally documented and the board was given three basic goals. Among them, it had to consult Pirkko, Brian’s wife, and their daughter Ronja, whose welfare was their first priority.
They could buy and sell land if they wished and they could divest fully from the farm to buy into other investments.
Chaired by farm consultant Don Urquhart, the board meets the Gallaghers and their accountants and bankers twice a year.
A memorandum of wishes has been incorporated in the Gallaghers’ wills and the family trust deed, so the trustees are fully aware of what is required. The operations manager in that eventuality would be Scott Montgomerie.
Gallagher said he’d had to learn not to get his own way.
“That’s a big one for farmers who are not very good at giving in at times,” he said.
Another big lesson has been accountability when spending other people’s finances, especially in the case of Grafton Downs where all proceeds are returned to the school.
Consistent performance is one of the major benefits from working in a team environment, Gallagher said.
“You tend to alleviate the mistakes and find that the team approach will produce more wins than trying to do it as individuals.”
The benefits show up in increased production too. When the working group was set up at Grafton Downs, the two operations that were merged were producing 103,000kg milksolids (MS). Today the farm is producing about 180,000kg MS.
Gallagher’s farms had been producing about 115,000kg MS and are on target for 150,000kg MS this year. Profitability has increased, too.
A key governance issue, Gallagher said, is ensuring everybody is on the same page.
“We may have our own ideas but there needs to be joint decisions when we are working together.”
And it was important to make sure you did your homework.
“You are often making decisions with others who are not directly involved in the industry,” he said.
“It could be bankers, it could be your accountant, or in our case it was the Grafton Downs board. They had a good understanding of the industry but they need to understand your business really well.”
And when a solid case or argument for a decision had been presented, especially a large-ticket item, “you must stick to your guns”.
