Friday, March 29, 2024

Leaders fail us

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Agriculture sector leaders, notably co-operatives, fall back too much on competition rather than collaborating and do not make clear strategic choices, research by insurer FMG says.
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But they will have to work together and stop needlessly protecting their trade secrets for export success to continue.

Even their own supply farmers have difficulty getting information out of them, the research found.

And in the spirit of the message it is sending the sector, FMG has decided to release the survey findings, something it doesn’t usually do.

It says the industry leadership model is under pressure with key people struggling to keep ahead of significant changes. 

Particular challenges are the rise of ethical consumers and the clear need to collaborate on industry issues.

FMG’s report was based on interviews with about 30 people working in high levels or being influencers in the sector.

The insurer does a deep-dive into the future every two or three years as part of the board’s strategic planning, client strategy and advice services head Jason Rolfe said.

Previous findings have not been released but the latest one has been because of the leadership issue that emerged.

“We haven’t needed to get involved before but it has come through strongly this time so we thought we should get some discussion going to show leadership ourselves.”

The same feedback is received from FMG’s farmer and grower clients, Rolfe said. 

“Our clients make up 50%-plus of the rural sector so we thought we needed to be more involved.”

The industry processors have information on consumer demands and insights but keeping the knowledge too close. 

In many cases farmers are not aware of what consumers want but are now starting to get the information from other sources.

“It’s all about trade secrets.

“They don’t want to share but we say there are a lot of people to feed.”

Agri leaders need to send clear signals to farmers about how they see New Zealand’s future, either as a commodity provider or a highly valued natural farming system setting high standards to drive value, the report said.

A choice has to be made and clearly communicated and it was probably the most important decision of our time.

NZ food is highly sought after for its clean, sustainable and naturally farmed origins.

Farmers should work to ensure premium product and the processors and exporters should then compete on market niches and value and not against each other. 

Those niches could be coastal lamb, organic dairy, high-country steak, grass-based products, carbon zero farms and production systems.

The outcome could be consumers paying a premium for NZ country of origin because of its inherent goodness.

The report said all industry players should agree to collaborate in pre-competitive areas – carbon zero, water quality, data storage and sharing, animal welfare, labour welfare and natural, non-factory farming.

“We see a future where pastoral-based leaders will work much closer on the nationwide and global issues.”

Rolfe said the change is important because even with a doubling or tripling of horticulture activity pastoral will still be by far the biggest farming land-use by area.

Another area of concern is mergers and acquisitions over the last 20 years removed the previous training ground for agri leaders in small regional organisations on their way through to national roles. 

People are now getting to governance levels with shallow experience.

“International experience is beyond most and for farmer-elected boards it’s extremely rare.”

The authors said the over-stretching of capacity is the area needing to be addressed. 

Boards should take less risk in international areas and allow more joint venture partnerships.

“This requires agri leaders to recognise their capability constraints and not try to be things they have no strength in.”

The report said NZ farmers and growers have a bright future but there will be changes. 

Technology advances, compliance and the required financial sophistication will produce farmers who are more business and goal focused. The future will have fewer farmers in it just for the lifestyle.

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