$70m plan to boost farm earnings | Stuff.co.nz

JON MORGAN

Farmer organisation Beef + Lamb New Zealand is developing a $70 million plan to lift sheep and beef farmers' earnings through on-farm improvements.

The plan, which is still at the concept stage, depends on the Government bearing half the cost.

So far it has received Agriculture Ministry approval to go to the next stage of the Primary Growth Partnership process, the drawing up of a detailed business plan.

Crucial to its final acceptance is that the proposal does not conflict with existing PGP-approved projects. Beef + Lamb has been told by Primary Industries Minister David Carter to talk to Farm IQ, an organisation created in 2010 to run a $151m project which is receiving $60m of government funding.

Farm IQ is backed by government farmer Landcorp and by the country's biggest meat company, Silver Fern Farms, and aims to improve meat industry earnings by finding what customers want and feeding the information back along the value chain.

Beef + Lamb's proposal is to look for on-farm improvements, but has the potential to clash with Farm IQ's moves to give farmers more information about their stock's performance through the use of electronic ear tags.

Silver Fern chief executive Keith Cooper has objected to what he calls the farmer organisation's commercial intrusion into the meat industry, and last month resigned his industry-appointed directorship of Beef + Lamb.

However, Beef + Lamb chairman Mike Petersen said Farm IQ was open only to farmers who agreed to sell a portion of their stock to Silver Fern and he wanted a project that would benefit all farmers.

Silver Fern and Farm IQ had each been asked to join the Beef + Lamb project, which in its early stages had the backing of two other big meat companies, Alliance and Anzco, as well as Blue Sky Meats and ANZ-National Bank.

Since receiving ministry approval to draw up a business plan, several other agriculture companies had asked to join.
Petersen said that in recent talks with Farm IQ, the firm had said it was not concerned about Beef + Lamb's project and the two were talking amicably about how to avoid potential clashes.

Farm IQ chief executive Collier Isaacs said the talks had yet to get down to "tin tacks" but agreement "should be feasible".

Petersen said the Beef + Lamb plan was to spend $70m over seven years, with $17m coming from Meat Board reserves, $17m from the industry and the rest from the Government.

It would focus on three main areas: Ramping up efforts to get practical science and technology research findings to as many farmers as possible. "There's been a lot of research done but the big problem is a lot of farmers haven't adopted it," Petersen said.

Improving farmers' business management skills. "Farmers don't necessarily understand balance sheets well, or equity and financing and use of capital? those sorts of things."

Using Beef + Lamb's extensive database to lift farmers' ability to benchmark their performances against others, by farm class, regionally and nationally. "Many farmers won't be performing as well as they think they are. They don't know what they don't know."

Petersen said it was a natural development of the recommendations of last year's Red Meat Sector Strategy, which identified huge potential for a lift in farming performance.

- ? Fairfax NZ News

Source: http://www.stuff.co.nz/business/farming/6646648/70m-plan-to-boost-farm-earnings

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