Federated Farmers Dairy chairperson, Lachlan McKenzie

The dairy season may be winding down for some, but as you can see by the reports in this Dairy Alert, things are not winding down at Federated Farmers.

I would like to thank all delegates and observers who attended our council meeting for their input and participation. It is your participation within our organisation that makes Federated Farmers the strong rural advocate that it is. Through participation and discussion we can form a collective view on issues and then advocate with unity.

I can assure everyone that I always have our members as my prime focus whenever discussing an issue through the media or while lobbying a minister. As a Federation we try hard to understand our members' concerns on a range of issues before we develop positions or policy.

Our industry has been built on a cooperative basis, and the old Dairy Board, under the Dairy Board Act, organised all dairy exports. Almost all of those supplying milk to the Dairy Board belonged to cooperatives, and the Board was required by Government to have three of its members appointed by the New Zealand Cooperative Dairy Company Ltd. This emphasis on cooperatives ended with the formation of Fonterra in 2001.

Now as an industry we face challenging times in understanding what it means to belong to a cooperative. The benefits are huge but there are also some responsibilities or requirements such as providing capital, while sharing in the collective benefits. As you will see below Federated Farmers Dairy has stimulated discussion on these issues. I encourage you all to think about these questions. What does a cooperative mean to you? What are the most important benefits from belonging to a cooperative? What do you think are your responsibilities as a member of a cooperative? Remember, most of us belong to several different cooperatives such as fertiliser, produce, or dairy cooperatives. If you have further questions on cooperatives do drop us a note, all Federated Farmers Dairy contacts are listed at the bottom of this Dairy Alert.

Regards,

Lachlan McKenzie
Chairperson
Federated Farmers Dairy
Phone:  07 332 3440
Mobile:  021 382 442
Email:  lmckenzie@fedfarm.org.nz

FEDERATED FARMERS DAIRY COUNCIL MEETING

This meeting was held in Wellington in February and those attending went home with new negotiating skills they could use in their own provinces and on their own farms. They also learnt that they could get better outcomes by influencing the decision making process.

The year of the cooperative was celebrated by having a number of speakers covering cooperatives. Ramsey Margolis, of the New Zealand Cooperatives Association, told the Council that the benefit of belonging to a cooperative would be maximised when members fully understood how cooperatives work. A cooperative is a business and must be managed as one. Matt O'Regan, Chairman of the Board of Westland Milk Products, spoke a little of the history of the cooperative and outlined the benefits to Westland of owning a strong cooperative. Harry Bayliss talked of his motivation to become involved with Fonterra as a Director, the skills a good director should bring to the table, and the role of governance in a successful cooperative.

The Council also heard about Fonterra's milk pricing regime from John Wilson, a Director of Fonterra, who emphasised that all farmers need to read the information Fonterra has provided them to build the confidence that Fonterra is pricing this milk correctly.

Effluent management was covered by Bridgit Hawkins, of Harmonics, a company that specialises in taking in data from clients and providing feedback to them, which in turn enables these people to make informed decisions. This has been tailored to deal with effluent management.

Kevin Hackwell, of Forest & Bird, spoke of the shared work on biosecurity that Federated Farmers, Fish & Game, the Department of Conservation and Forest & Bird are doing and thanked Federated Farmers for its support on possum eradication. He noted that environmental restraints may affect dairy farmers' ability to farm.

Mark Steel, of the Ministry for Economic Development, spoke of the importance of food exports to New Zealand's economy and noted that efficient productivity on-farm is essential, but forward integration holds the key to greater prosperity. He noted that cooperatives, especially dairy cooperatives, are common around the world but that they have achieved low returns.

Guy Beatson, from the Ministry for the Environment, spoke on the need for producers to pay attention to the needs of the customer, not only what they want, but on the perceptions they have on production methods. Customers make shopping decisions based on carbon footprinting and environmental type measures. Guy, like Mark Steel, spoke of the need to forward-integrate into the market.

George Troup, from the Ministry of Foreign Affairs and Trade, told of the role of government agencies in overseas markets and how they support New Zealand in the market place.  The threats in the market place are around the environment, climate change, animal welfare and others. The importance of influencing the customers by building personal relationships was emphasised.

Remits passed were:

Animal shelter technology - The Dairy industry group of Federated Farmers of New Zealand, in recognising the potential for environmental and economic benefit for New Zealand, offers its support into research of the environmental and financial benefits and costs and other potential issues associated with the adoption of animal shelter technology in New Zealand.

Federated Farmers remuneration survey - Federated Farmers proposes that the farm employee remuneration report for dairy farm managers, 2IC to farm owners and herd managers is defined appropriately.

Inductions - That Federated Farmers negotiates to keep the level of inductions at no more than 4 percent after 2012.

DAIRY CATTLE CODE OF WELFARE

The recent release of the Dairy Cattle Code of Welfare by Government and the National Animal Welfare Advisory Committee means we as dairy farmers must now operate under the Animal Welfare Act 1999 plus the new Code.

The Code is made up of two parts.

• Firstly, the minimum standards, of which there are twenty. These will be the ones that the Ministry of Agriculture and Forestry's Animal Welfare officers and the SPCA will operate under when doing on-farm inspections and prosecutions. There are some new inclusions within the Code that exclude some of the practices that you may be using on your farm. Please update yourself on these.
• Secondly, under each minimum standard sits a recommended best practice and information for dairy farmers to use.

Animal welfare practices are coming under increasing scrutiny by the public and consumers, and this is one area that, as an industry, we need to collectively get our act together on.

The Code and Guidelines can be obtained from writing to the Executive Coordinator, Animal Welfare, Ministry of Agriculture and Forestry, PO Box 2526 Wellington 6140, by emailing animalwelfare@maf.govt.nz or by visiting the MAF website by clicking here.

VARIABLE ORDER SHAREMILKING AGREEMENT UPDATE

The Department of Labour is now processing the revised Agreement and expects to have it completed by May. As with all laws, this new Agreement when it comes out will cover all Variable Order sharemilkers and employers who signed the current 2001 Agreement.  Federated Farmers Dairy will keep you informed of progress on the Agreement.

NEW ZEALAND DAIRY INDUSTRY AWARDS

All the regional winners for the competition have now been decided. Federated Farmers congratulates the winners around the country and recognises all the work that all entrants have put into preparing for the competition. Details for the field days can be found by clicking here.The national final will be held in Rotorua on Saturday, 15 May and tickets can be purchased by clicking here.

EFFLUENT SYSTEMS

The dairy industry has just completed developing draft standards around effluent systems and storage. The draft documents are now out for consultation and can be found by clicking here. The objective of having such standards is to give farmers more confidence that when they invest in a system it will do the job it is supposed to do.  The people and management factor is being addressed by specific training in effluent management through courses developed by Agriculture ITO.

PRO-COMPETITION REGULATORY REGIME

Recently Federated Farmers Dairy submitted on ‘The future of the pro-competition regulatory regime in the New Zealand dairy industry', a discussion document from the Ministry of Agriculture and Forestry (MAF). The document discusses the Dairy Industry Restructuring Act 2001 (the DIRA) as it approaches the sunset clauses put in place when Fonterra was formed in 2001. Federated Farmers submitted that the Act be allowed to expire as originally intended and that as long as milk is priced fairly and efficiently, the Raw Milk Regulations remain. Federated Farmers also prefers the auction system (Option 2a) for pricing this milk, as set out in the MAF ‘Review of the Dairy Industry Restructuring (Raw Milk) Regulations: Options for addressing industry concerns', May 2008. The pricing method that will be used for the 2010/11 season, while inferior to an auction system, is also acceptable. The auction system has been signalled as being an acceptable method by the Minister. To view the submission, please click here.

WITH FEDERATED FARMERS DAIRY EXECUTIVE MEMBER, ROBIN BARKLA

I believe that the reasons for belonging to a cooperative have been well articulated many times over.

To me, Fonterra's current focus is not about ‘capital to grow', it is about ownership, management and the current directors being constrained by our existing ownership structure. They are using the capital structure argument as a way of getting this changed.

The management arm of any company, by nature, always wants more. "Give us more and we can do so much!" If you want proof of their fallibility, look at the amount of carnage the last 18 months of global financial crisis has caused them. Yet for all that has happened Fonterra still seems to be in good shape. This begs the question, do we need to change that much?

The Fonterra board want us to believe that they have learnt their lesson from November 2007 and that they will not propose anything that risks control or ownership. So do we trust the board or not? I have seen enough plays on words over the years to be rather sceptical about what I'm told these days.

Robin Barkla
Executive member
Federated Farmers Dairy
Phone:  07 323 6958
Mobile:  027 218 2131

ON-FARM INSPECTION BY LOCAL AUTHORITIES WITH FEDERATED FARMERS DAIRY VICE-CHAIRPERSON, JOHN BLUETT

Some regional councils and local authorities are now taking an enforcement, rather than an advisory, approach to farm effluent inspections and are there to gather information to see if there is a case for prosecution. These regional councils therefore are not able give advice anymore.

Farmers need to be very careful about what is said and made available when being inspected, as in some cases this can be recorded as evidence. It is also important that employees know what the policy is for dealing with authorities when they visit the farm, as both present and past employees have been used in gathering evidence. Make sure all staff understand what to do and say during any such visits. If they are not sure, it is better to say nothing.

ONE EVENT

Federated Farmers Dairy will be holding its AGM and conference in conjunction with Federated Farmers One Event in Invercargill from Wednesday, 23 to Thursday, 24 June 2010. More information will be available in the next edition of the Dairy Alert and on the Federated Farmers website closer to the date.

SHAREMILKERS’ SECTION AGM AND SHAREMILKER EMPLOYERS’ AGMS

The AGMs for these groups will be held in Hamilton in early June. More information will be available in the next edition of the Dairy Alert and on the Federated Farmers website closer to the date.

LEADERSHIP COURSES

We still have places left in our level one, Getting Your Feet Wet leadership course to be held in Wellington from Wednesday, 16 to Thursday 17 June 2010. Getting Your Feet Wet is an introduction to agricultural advocacy and Wellington politics. This is an entry level course for members who don't currently hold leadership roles but are thinking about getting more involved. Come along and learn how to be more persuasive; hone your lobby skills to get the right results; walk the corridors of power and have some fun. Places are limited so register your interest now by calling events assistant, Lauren Mann on 04 470 2165 or by emailing lmann@fedfarm.org.nz.

ON-FARM MANAGEMENT AND INSURANCE ADVICE

FMG provides on-farm risk management and insurance advice specific to your needs. FMG have a wealth of knowledge and insights that help you achieve your goals. For more information, please contact FMG by clicking here. Mention the Friday Flash and FMG will send you a free cowshed fire claims scenario and rain chart.

MEMBER BENEFITS AND OFFERS

To view special discounts exclusive to Federated Farmers members, please call 0800 327 646 or click here to log onto our members only area.

BEN & MARK, BOYS OF THE HIGH COUNTRY

Christine Fernyhough's true story of two boys who live on one of New Zealand's largest high-country stations, with stunning photographs by John Bougen is now available for sale on the Federated Farmers website. Federated Farmers have it for the special price of $30 for members (non-members $36.99). Ben & Mark, Boys of the High Country is destined to become a New Zealand classic and would make a beautiful gift. We have a limited number so get online, by clicking here and order yours today.

THE ROAD TO CASTLE HILL: A HIGH COUNTRY LOVE STORY

Christine Fernyhough's first High Country tale is now available on the Federated Farmers website. Warm and humorous, this inspirational book tells the story of a woman bold enough to do what many urbanites dream of: embark on an entirely new life and throw herself into a considerable challenge. Federated Farmers have it for the great price of $38.50 for members (non-members $45.50). Beautifully illustrated, The Road to Castle Hill is also a celebration of New Zealand's high-country way of life.

CONTRACTS, AGREEMENTS AND LEASES

These include land, stock, contractor, sales and purchase, agreement to grow, log books, access pads, Over Dimension Certificates and employment. Remember, it's a legal requirement to have an employment contract for EVERY employee so if you don't have a current employment agreement, then order one now. Contracts, agreements and leases are available in both electronic and hard copy formats for your convenience. To purchase, call 0800 FARMING or click here.

Please remember that if you have any issues or queries you would like to discuss, please feel free to contact Federated Farmers on 0800 FARMING (327 646) or contact your local Federated Farmers Dairy representative or one of the Executive team as listed below.

HEAD OFFICE

Federated Farmers of New Zealand
PO Box 715
Wellington 6140
Tel:  04 473 7269
Fax: 04 473 1081
www.fedfarm.org.nz

STAFF CONTACTS

Dairy policy advisor
Ann Thompson
Phone:  0800 327 646

EXECUTIVE CONTACTS

Chairman
Lachlan McKenzie
Phone:  07 332 3440
Mobile:  021 382 442

Vice-chairman 
Willy Leferink
Phone:  03 307 2666
Mobile:  021 796 037

Vice-chairman
John Bluett
Phone:  07 825 9709

Executive
Robin Barkla
Phone:  07 323 6958

Executive
Andrew Hoggard
Phone:  06 328 9677
Mobile:  027 230 7363

Sharemilkers Representative
Jeff Bolstad
Phone:  07 889 7475

A full list of the Federated Farmers Dairy team can be found by clicking here.