Unleashing the inner farmer
Released 10 Jan 2011
By Don Nicolson, Federated Farmers President
Can a Kiwi town be world famous not in New Zealand? Take Bunnythorpe in the Manawatu. Sandwiched between Feilding and Palmerston North, Bunnythorpe may define provincial but it incubated the Glaxo in global giant GlaxoSmithKline - GSK. Its founder, Joseph Nathan, remains the most successful New Zealander you've probably never heard of. Even Australia's Nufarm, once Fernz Corporation, hailed from there. Today, Bunnythorpe remains home to Fonterra Cooperative Group's research and innovation centre. You may ‘blink and miss it', but it's got something positive flowing in the water.
Companies like Gallagher Group and Ravensdown prove you can be part of the world's biggest business without joining me in Waimatua. And, as an economic vision, you couldn't get a simpler one. While everyone has to eat, all farmers everywhere need services and support outside the farm gate. So you have to wonder if our economic ducks are in the right order. Auckland and Wellington are showered by corporate and Government attention. Take broadband. Despite our export economy being in the heartland, over one million ‘rural' Kiwis are second class when it comes to equitably funding its rollout.
Perhaps it's the curse of the "sunset industry" quip from the mid 1980's or, as one respected business commentator observed, "probably we still suffer a bit of cultural cringe when it comes to acknowledging the extent to which our fortunes rise or fall on grass growth. There is no shortage of commentators (including myself) who will point out we can't afford to rely on it forever". That's myopic. Each year Kiwi farmers spend around $13 billion on everything from number-8 wire to fertiliser to IT. With over half of humanity now living in Asia-Pacific, Michael Cullen put it best, for the first time in our history we're living in the right part of the world at the right time. I'll add that we're in the right business too and convincing politicians and advisors of this is what Federated Farmers does. Yet while farmers get a well done for our export efforts, money is wasted trying to replace us. It's time to join the dots.
Joseph Nathan leveraged off agriculture and built a leviathan. While Nathan in Bunnythorpe started out with infant formula, GSK today produces everything from Horlicks to Panadol. GSK's turnover is some 30 percent of our entire Gross Domestic Product and it all started from agriculture. So where are our indigenous versions of Monsanto, Pfizer or Rabobank? At least farmer-owned Fonterra is involved in everything from human nutrition to pharmaceutical products. But aside from Fonterra we struggle to convert, much like the New Zealand cricket team. Fernz Corporation started here only to flee to more business friendly pastures across the Tasman. Hamilton's Pacific Aerospace could dominate global agricultural aircraft manufacturing except our weak capital markets count against it. We're all up against the biggest fiscal hoover of all - Government.
Unleashing ‘innovation man' means pairing back Government to less than a third of the economy. This forces businesses to think and invest instead of cuddling up to Government in the hope of being thrown a private-public partnership or a juicy SOE listing. If we only had Government spending levels from 2000, adjusted for inflation, $30 billion would be left in the economy each year. That's almost like two Fonterra's. We need new agribusinesses but we won't advance until Government stops borrowing $413 every second in every minute of every hour in every day. After all, if a product or service works in agriculture here it will generally work anywhere. Playing to our natural competitive advantages is the vision we need.
