The proposal asks for a 10 cents increase in the sheep meat levy and 80 cents lift in the beef levy, respectively 16.7% and 18.2% lifts from the levels that have been in place since 2009.
Since the 2015 referendum B+LNZ has reprioritised spending, which has resulted in net annual savings of $1.4 million made up of reduced spending on offshore offices and market development activities partly offset by investment in environmental projects, work on the origin brand and research into alternative proteins. Smaller investments have also been made into the appointment of Jeff Grant as the Brexit Red Meat Sector ambassador and B+LNZ Genetics.
The process is an important step towards B+LNZ’s goal of strengthening its connection with farmers since the dark days of the 2009 referendum when the wool levy was lost, removing a $6m contribution to the organisation.
The 2015 referendum provided a strong endorsement of the work being done on behalf of farmers with 85% of votes in favour compared with a narrow majority in 2009.
However, B+LNZ deliberately opted not to ask for a levy increase in the referendum but made a commitment to consult farmers before any increase.
The strategic review after the last referendum led to a refocus of the organisation’s key areas of activity to reflect the changing global marketplace in which sheep and beef farmers operate. Recent events have confirmed the relevance and importance of those areas identified.
For example, competitors, notably Australia and Ireland, have been quicker off the mark in developing their own origin brands, which makes Taste Pure Nature a critical step towards building a credible Red Meat Story for meat exports.
Secondly, overseas customers increasingly demand information on how meat is produced and where it comes from with particular emphasis on animal treatment, traceability and environmental performance.
Then domestic stakeholders, from central and local government to individuals, require evidence of environmental responsibility. That makes it essential to tell the farmer story persuasively and convincingly.
Lastly the discovery and spread of Mycoplasma bovis has put biosecurity risk front and centre of public awareness, not least because taxpayers are faced with an estimated $600m bill for eradication. Preventing biosecurity incursions remains a critical factor for the agricultural sector.
It’s important to note the industry’s share of M bovis eradication will be funded by a separate contribution under the Government Industry Agreement designed to cover biosecurity incursions and supported by 85% of voting levy payers.
B+LNZ is negotiating the sector’s share with DairyNZ, which will result in a separate levy for sheep and beef farmers.
The Government has agreed to carry the cost of eradication for the first two years, requiring the industry to start contributing after that.
Two key activity areas – development of the origin brand and the environment strategy – have already gained plenty of positive feedback. Farmers and meat companies have been very supportive of the work on Taste Pure Nature and alternative proteins while the environment strategy was welcomed by the Government at its launch in May.
B+LNZ will certainly consider recent suggestions the Taste Pure Nature brand might undermine Lamb Company promotions in North America when discussions with meat companies about the finer details of the brand development process take place.
Existing company brands will be reinforced by proposed activities promoting the origin brand and company executives I have spoken to, including Simon Limmer of Silver Fern Farms, are very supportive of the concept of Taste Pure Nature.
However, B+LNZ and the companies are still working through the precise details of the activation process to ensure the development of a successful NZ meat brand.
There is plenty of goodwill between B+LNZ and companies and not too many years ago there were discussions about forming a single industry good organisation to represent farmers and processors. That was rejected, partly because not all meat companies were in favour, but also because the farmer organisation realised it had a critical role in representing the specific needs of farmers, which would be compromised by combining with the Meat Industry Association.
Since 2009 B+LNZ has focused on spending the levy on the aspects of farming that farmers value while making sure they are aligned with changing strategic priorities.
The dramatic improvement in levy-payer support in 2015 and the work done as a result of the strategy refresh provide plenty of evidence B+LNZ has succeeded in justifying its existence as a focused sheep and beef farmer organisation. Initial farmer response to the consultation process suggests there will be strong support for the levy increase to allow work to continue on delivering results against the key priorities for the benefit of the whole red meat sector.
