Word of the day

February 24, 2012

Appolloian – of or relating to Apollo or his cult; harmonious; serene; ordered ; denoting or relating to the set of static qualities that encompass form, reason, harmony, sobriety; the power of critical reason as opposed to the creative-intuitive.



February 24, 2012

Just 2/10 in the Herald’s Super 15 quiz both of which were guesses- never have been any good at rugby trivia.

Directors beware

February 24, 2012

Four directors of Lombard Finance have been found guilty of making untrue statements in the      company’s offer documents.

Judge Robert Dobson said the Crown had proven beyond      reasonable doubt aspects of four charges, including failure to properly disclose the company’s liquidity risks and deteriorating cash position.    

They were found not guilty of distributing an advertisement  that included an untrue statement by sending a letter t0  investors in March 2008.   

There may be an appeal.

Two of the directors were former government ministers – Sir Douglas Graham and Bill Jeffries.

Whether or not there is and regardless of the outcome if there is, this case is a warning to all directors that they must understand what they are doing and the responsibilities of their role.

It’s also a warning to shareholders that people who’ve run the country might not necessarily have the skills to run a company.

Friday’s answers

February 24, 2012

Thursday’s questions were:

1. Who said: “Farming looks mighty easy when your plough is a pencil and you’re a thousand miles from the corn field“.

2. In which book would you find: Flora Poste, Ada Doom; Graceless, Aimless, Feckless and Pointless; Viper and Big Business?

3. It’s  ferme in French, fattoria in Italian, granja  in Spanish and pāmu in Maori, what is it in English?

4. Who wrote A River Rules My Life and what was the name of the station on which she lived?

5. Which is New Zealand’s largest farm?

Points for answers:

Andrei got three.

Gravedodger wins an electronic bag of necatarines for five right and bonus for lots of extra information.

Raymond (assuming he knew what Andrei said before he read it) also wins an electronic bag of necarines with five right and a bonus for extra information.

Adam got two and a bonus for extra info.

Grant got three.

Answers follow the break:

Read the rest of this entry »


February 24, 2012

9/11 in the Herald’s Changing World quiz.

Free-range no guarantee of animal welfare

February 24, 2012

Free-range hen farms are often touted as superior to those which keep their birds in cages and the eggs attract a premium price.

But the SPCA rightly points out that free-range is no guarantee of good welfare.

Recently a free-range layer hen farm in Martinborough was abandoned by the farmers. Many hens were left neglected, to fend for themselves. The SPCA wants to alert New Zealand consumers that term “free-range” is no guarantee of good animal welfare but simply a marketing term.

Robyn Kippenberger, National Chief Executive of the Royal New Zealand SPCA, confirms there are no legal definitions of any farming methods in New Zealand so unless farms are audited and checked regularly against specified standards there will always be room for poor welfare.

“Don’t be tricked by clever and confusing labelling of products” says Ms Kippenberger

“Marketing terms “free-to-roam”, “free-range” or “free-farmed” are no guarantee of good animal welfare without independent auditing and a third party trusted certification mark. Poor farming practices can lead to neglect such as seen in the free range farm in Martinborough. Events like this bring the whole industry into question”

The SPCA National Blue Tick accreditation scheme offers a system of specific standards and auditing to farmers wishing to ensure consumer confidence in their animal welfare practices. The Blue Tick logo on eggs, pork and chicken identifies these products have been farmed to high SPCA welfare requirements. Independent auditors visit farms regularly and have contractual agreement to spot audit without notice.  Part of this transparent process makes the farming standards applied by farmers and auditors available for consumers to download from the Royal New Zealand SPCA website.  http://rnzspca.org.nz/bluetick/blue-tick-standards

Lots of terms used in marketing to differentiate produce and products which are supposedly kinder on stock or the environment are empty words which don’t necessarily mean anything.

They’re designed to sell by salving the consciences of gullible consumers but there is no guarantee that the farm practices and methods of production live up to the marketing message.

Fonterra’s frothing won’t win friends

February 24, 2012

When the government announced proposed changes to the Dairy Industry Restructuring Act, Fonterra started frothing.

I agreed with the company and said so in a couple of post here and here.

But after further consideration of the proposals I’m having second thoughts.

One of Fonterra’s complaints was that the changes to the DIRA would mean it is subsidising foreign-owned companies. But on closer-reading I don’t see any danger of that.

The company’s competitors are Goodman Fielder which supplies the domestic market; six relatively large exporters (two farmer cooperatives, two companies with a majority of New Zealand ownership and two majority overseas-owned companies); and 19 mostly small, food processors and cheese makers – included in these are boutique cheese and ice cream companies.

One of the proposals is to set a three-year limit on access to raw milk by Fonterra’s competitors who collect a certain amount of milk from their own farmer suppliers.

That means it’s probable that all six of the large exporters would lose access to raw milk at the end of the 2014/15 year. That would reduce the amount of raw milk that Fonterra has to supply its competitors by 250 to 300 million litres so it would be supplying less milk to competitors not more..

I can’t see what Fonterra has to fear from that, especially when the 50 million litre maximum each competitor can take would be maintained.

The proposal also aims to ensure that Fonterra’s largest competitors must take the raw milk in line with the  seasonal production curve.

This is to ensure that competitors can’t take less milk when farm production is high and more in the shoulders of the season when production is lower.

Fonterra is concerned that the wording in the proposal would leave the company to cope with the added expenses of the extra capacity needed to deal with peak milk without its competitors facing the same costs.

If that is the case, then Fonterra would be subsidising other companies to some extent. But it has the opportunity to explain its concerns and offer a fairer solution while the proposals are open to consultation.

Apart from the possibility of having to accept an unfair share of the peak-milk costs, which Fonterra shouldn’t have any trouble changing, I don’t see any grounds for the complaint that it would be subsidising independent processors.

They will continue to have to pay the farm gate milk price which Fonterra pays its suppliers as they have been.

The more I look at the proposals the less I understand Fonterra’s force 10 opposition to them.

The strong reaction will get up the government’s nose and is unlikely to gain any support from the public who generally have little sympathy for the company.

Today is the last day for submissions and Fonterra has been encouraging its shareholders to make their concerns known.

But the company might have been too successful in getting farmers upset. There is a danger many are so riled they will reject the company’s proposals for Trading Among Farmers which is also covered in the proposals up for consideration.

The company has been grappling with a solution to redemption risk – shareholders redeeming shares when the price is high – for some time.

It believes that allowing farmers to buy and sell among themselves would reduce this risk.

Shareholders haven’t been particularly enthusiastic about this proposal although I am sure that fears this will be the first step towards a public float are groundless.

Any share trading will be restricted to suppliers and it won’t be any easier to get from there to a public float than it would be from the current position.

However, Fonterra’s frothing has been successful in getting shareholder oppostion to proposals for the supply of raw milk to competitors and if it’s not careful they will be just as opposed to the company’s TAF proposals.

The public will have no interest in that and given Fonterra’s  over the top reaction to the DIRA proposals it’s unlikely to have any sympathy from the government if that happens.

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