Thursday, March 28, 2024

ALTERNATIVE VIEW: Could one levy group be the change we need?

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A mate contacted me after a recent column to ask “if the Brits can relatively and quickly reform their levy organisations why can’t we?”. He has a point.
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In the UK, there is just one industry good levy organisation and that is the Agricultural and Horticultural Development Board (AHDB). It was established in 2008 and defines its purpose as “to inspire our farmers, growers and industry to succeed in a rapidly changing world”.

The groups that amalgamated to form the AHDB were the Meat and Livestock Commission – which handled pigs, beef and lamb, the Milk Development Council, the Horticulture Development Council, the Home-Grown Cereals Authority, and the British Potato Council. 

Have a look at their website. They make our levy organisations look distinctly pedestrian by comparison.

Its statutory purpose is to improve UK farming’s efficiency and competitiveness. 

And while the 2019 Annual Report was written under the Sword of Damocles of Brexit and pre-covid-19, it’s still  interesting and relevant.

They talk about their “independent and evidence-based approach” and having a wide-ranging and singular focus. It would be good to see that happening here.

The fact that it is well-resourced is obvious, but its budget last year was just £68 million (NZ$131m).

New Zealand farmers are currently paying industry good levies of NZ$112m, and that’s not far behind.

Here’s the rub though. In the UK I’m told there are 138,000 farmers, while in NZ we have a little over a third of that. According to Statistics NZ we have  52,000 farmers.

The UK has one levy organisation, and we have five levy groups providing a mass of duplication.

Having one levy group in the UK  gives them a greater focus with less duplication, and they are infinitely more effective.

A simple example is that methane mitigation is the same, be it with sheep or cows, and reducing nitrogen is similar, as is trade access. We don’t need a bevy of organisations to handle those issues, we need just one.  

The National Farmers’ Union (NFU) is the political voice of the British farmer.

I visited the NFU some years ago and had lunch with their executive group. It was an interesting occasion and I was made to feel welcome.

As our trade negotiators know, the NFU is a focussed and powerful organisation. It works closely with the AHDB for the common good.

It has 90,000 farmers, growers and countryside members with an annual income of around NZ$64m.

It also has NZ$246m in reserves – that is some fighting fund.

In NZ we have Federated Farmers with an annual income of less than NZ$9m, and what absolutely frustrates me is that we’re an agricultural country. We largely live off cows and sheep.

In 2018, our agricultural exports were NZ$80 billion, or around half that in British pounds.

The British government proudly tells me that in 2014 the contribution from agriculture and fishing to the economy was about NZ$21.5bn.

Further, beef and veal was worth NZ$5bn, mutton and lamb NZ$2bn, and milk NZ$9bn.

That means that compared with NZ agriculture they are a subsidised bit player.

What galls me is that they come across as being smarter.

Instead of a heap of industry good levy organisations they have just one. It’s not a whole lot better resourced than our group but infinitely more efficient and, I’d suggest, with a far better focus.

Logic suggests that one organisation would find it difficult to waste money and resources by competing with itself.

Realising the importance of a strong farmer voice, the British farmers have created one with reserves, or in other words a fighting fund of massive proportions.

They are effective across all political formats and even have an office in Brussels.

Federated Farmers in NZ is certainly effective but hugely under-resourced for the challenges it has.

The Brits farming organisations are also smarter than ours. If you go to the NFU and AHDB websites you’ll find they’re in-sync.

There are projects and issues where one group is supporting the other and some where they’re both involved.

It is hard to see any patch mentality.

I’ve spoken to friends and colleagues in the UK and they tell me the system works well. But if I went to the Tinui pub, I’d get a different reaction on the local scene.

Frustratingly, by the complete lack of debate on the issues, it would appear that NZ farmers are happy with the status quo, even though in the latest Dairy NZ referendum just over a third voted for the levy to continue.

We desperately need an informed debate on farmer representation into the future.

We need to bulldoze the silos that are costing us heavily, in both money and effective support.

More importantly, we need an industry leader prepared to grasp the nettle.

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