Vege growers furious at Woolworths

Vegetable growers are furious at Woolworths’ expectation to cough up hundreds of thousands of dollars for its Jamie Oliver campaign.

That sounds familiar, but its producers on the other side of the Tasman whose ire is raised this time.

AUSVEG is urgently calling on the ACCC to undertake immediate action to investigate the behaviour of Woolworths who are seeking enormous contributions from Australia’s horticulturalists to pay for their much touted Jamie Oliver campaign.

Woolworths are demanding hundreds of thousands of dollars from individual growers around Australia to fund their new campaign in the form of a massive new 40c per crate charge on top of the 2.5 – 5 per cent fee growers are already required to pay Woolworths for them to market and promote their produce. 

AUSVEG is the leading horticultural body representing Australia’s 9,000 vegetable and potato growers.

Growers around the country are being given no undertaking from Woolworths on what return they will see from the additional funds they are being asked to provide to fund the promotion. . .

Woolworths’ CE was guest speaker at a dinner we attended in Melbourne last year.

He was selling the company message of how they wanted to deal direct with growers and do away with the people in the middle.

There’s no benefit in cutting out costs in the supply chain if new costs are going to be imposed on growers with no guarantee of a dividend from the extra spent.

 

Rural round-up

Australian milk war becomes the NZ product war:

Federated Farmers of New Zealand believes Australian consumers will ultimately decide it’s not fair dinkum to remove New Zealand products from the shelves of Coles and Woolworth supermarkets in Australia.

“It seems like the Australian milk wars, which so badly affected the viability of many Australian dairy farmers, is fast becoming the New Zealand product war,” says Bruce Wills, Federated Farmers President and its trade spokesperson.

“My take on this is that Australian consumers will see a lessening of choice and quality as being not fair dinkum.

“Australia is New Zealand’s second largest export market behind China so what goes on there does matter.

“This seems less a reaction to consumer demand and more a new chapter in Australia’s supermarket war.  Coles and Woolworths are cynically trying to proclaim themselves truer than blue Aussie companies. . .

 

A tale of two spills – Willy Leferink:

What would you say if a dairy farmer took full responsibility for the actions of his relief milker and copped a $45,000 fine in the process?  All the while, human and industrial effluent leaks almost daily into our major rivers and harbours with very little mention. 

Wairarapa dairy farmer Selwyn Donald accepted that as the farm owner, the buck stopped with him. There’s something wrong with a picture where a farmer or business gets pinged but council sewerage spills are either covered by “emergency discharge consents” or a slap by the wettest of wet bus tickets.

Last July, Hamilton City Council was “sentenced” after it released about the same volume of human effluent into the Waikato River as happened on Mr Donald’s farm.  Did Hamilton cop the $600,000 fine the media talked about?  Did the guy at Hamilton responsible get charged just like Mr Donald did?  No way.  That was all traded down to stream restoration, planting and fencing near to where the council spill took place.  Restorative justice.  The guy fingered saw all charges “dropped” against him because Hamilton pleaded guilty. . .

Vehicle tracking programme taking off – Sally Rae:

It was while driving a tractor in Australia that Andrew Humphries came up with the idea of a software system to track farm vehicles.

After growing up on a sheep and beef farm near Gore, he headed to the University of Canterbury where he spent a year studying computer engineering.

He then returned to the farm for four years, flying to Western Australia each year to drive seeding rigs during the April-June seeding season. . .

We don’t’ like seeing animals suffer – James Houghton:

In light of the recent story around the footage of a farmer in Chile euthanizing some calves, there has been a lot of uproar and emotion. To me it is understandable because I know just how awful it feels to have to euthanise an animal and how bad things look with limited information.

It is no fun shooting an animal, and anyone who has done it can tell you that it is not an easy job either in the practical or emotional sense. But if you are to work with animals you need to have the strength to take responsibility for that animal and be there for them when they need you. Recently, I found a cow in the paddock with a broken leg and I had to put her down. It was horrible, but what would have been worse is if I had left her and waited for a vet to come, which could have been the following day. On some properties the farmer can be over an hour’s round trip from parts of the farm. So when you encounter an animal in pain and distress, such as a botched attempt at poaching, then you need to have a means to end their suffering. Banning emergency measures would be wrong but neither should it be the first measure.

We have rules and guidelines around what we can and cannot do, for this very reason, so that farmers do not have to let an animal suffer. These rules have to be realistic and practical otherwise farmers won’t be able to do what is right and help put the animal out of its misery. . .

NZITO and Primary ITO join forces:

On Saturday, 1 February 2014 the New Zealand Industry Training Organisation (NZITO), the industry training provider for the meat processing, dairy manufacturing and seafood sectors, officially merged with the Primary Industry Training Organisation (Primary ITO) as the Government’s strategy to amalgamate ITOs continues. Primary ITO provides industry training across the agriculture, horticulture, equine, water and sports turf industries.

The two organisations share a natural synergy and the move will help to strengthen and enhance the links between the producer and processor sectors. The merger also means Primary ITO is now officially the largest ITO in the country.

As well as training the workforce involved in the production and processing elements of the food chain, Primary ITO also provides qualifications for people working in the service sectors connected to the primary industry. While these sectors are not export focused, they still have an important role to play.

NZITO Chairman, Graeme Sutton, says “we’ve created an organisation that offers the complete primary industry training package. There’s enormous capacity for training and education to raise global and national awareness of New Zealand’s primary industry.” . . .

And a media release:

Ambitious young Māori dairy farmers urged to enter Ahuwhenua competition:

This is the final call for all candidates to submit their entries for this year’s Ahuwhenua Young Māori Farmer of the Year competition. Entries close on Friday 14 February 2014.

Sponsored by Primary ITO, Te Tumu Paeroa and Allflex, the competition alternates between dairy and sheep and beef farming and will for the second time recognise the skill and proficiency of young Māori employed in the dairy farming sector.  It is free to enter and open to those aged 16-25 who are currently enrolled in or have completed a National Certificate in Agriculture Level 3 or higher in the last year.

“The judges will be looking for ambitious young Māori with initiative and industry knowledge,” says Fred Hardy, General Manager of Strategic Business Development at Primary ITO. 

Fred, who acts in an advisory capacity, says those who enter the competition will be rewarded with ample opportunities to build their profile within the industry.

“The competition gives you access to a network of industry professionals and expert feedback, so it is necessary for entrants to have clear goals in mind.” He continues, “It’s also important that they demonstrate a commitment to Māoritanga.”

The finalists will be announced in April and are invited to attend the Ahuwhenua awards ceremony in Tauranga in June, where the winner will be announced and awarded a cash sum of $3000. 1^st and 2^nd runners up will each receive $1000.

Previous winners, dairy farmer Tangaroa Walker and sheep and beef farmer Jordan Smith, have both embarked on successful farming careers and look back at the competition as a key stepping stone in their journey to success.

For detailed information about the Young Māori Farmer of the Year competition click here.

Entry form here.

Rural round-up

Staff vital part of dairy farm –  Sally Rae:

At Willowview Pastures in North Otago, staff are considered an integral part of the business.

Owners Geoff and Katrina Taylor run the dairy farm on the lower Waitaki Plains near Waitaki Bridge.

Employees were given responsibility for particular on-farm tasks, described by Mr Taylor as their on-farm ”niche”, but still kept up with what was happening farm-wide. . .

Homeopathy and farming; let’s do better, media – Grant Jacobs:

Today Fairfax NZ News published at Stuff.co.nz an article titled, Homeopathy key for dairy farming couple. Unsurprisingly this has been spread to other sites, including pro-homeopathy sites.

Unlike many (most?) articles at Stuff, no means of commenting on this article are available.

Let’s quickly look at key problems in this story.

We might use as inspiration the TED slogan, “ideas worth sharing”, altering it to fit our purposes “information worth sharing”, considering ‘information’ and ‘news’ to be synonymous.

It carries with it a catch: if the information isn’t sound, it’s not worth sharing – not worthy of a place in a newspaper or news website. . .

Welsh shearers learn by competing in NZ – Helena de Reus:

Competing in New Zealand is a chance for Welsh shearers to learn from the best.

Welsh shearing team manager John Davies is touring the country with shearers Gareth Daniel and Richard Jones to contest the four-test Elders Primary Wool series between New Zealand and Wales. The series reached Balclutha at the weekend.

”New Zealand have the best sheep shearers in the world, so it’s good to learn from them and compete against the best.” . . .

Wool titles go far and wide:

Young shearers and woolhandlers fought for three titles at the Otago Shearing and New Zealand Woolhandling Championships in Balclutha yesterday.

The three winners of yesterday’s competition once again hailed from outside Otago, with Erica Reti (Gore) winning the New Zealand junior woolhandler title, Carlton Aranui (Raupunga, Hawkes Bay) winning the Otago junior shearing, and Dylan McGruddy (Masterton) taking the intermediate shearing title.

Two South Island woolhandling circuit titles were also awarded, with Liv Gardner (Southland) winning the junior section and Juliette Lyon (Alexandra) taking the senior. . .

Hort NZ to lobby on labelling:

The national horticulture body says it will continue to keep a close watch on moves by Australian supermarkets to remove New Zealand food products from their shelves, even though nothing has come from political talks on the issue.

The two big supermarket chains in Australia, Coles and Woolworths, are backing the Buy Australian campaign and as part of that, say they’ll stop stocking New Zealand products in their house brands.

Prime Minister John Key raised the issue at a meeting with his Australian counterpart Tony Abbott last week, but was told it was a commercial decision for the supermarkets and did not breach the Closer Economic Relations (CER) free trade agreement between the two countries. . .

Drought roadshow starts:

Farmers in Hawke’s Bay, East Coast and Bay of Plenty – areas still recovering from last year’s drought – will attend a roadshow this week to find out how they can drought-proof their farms.

They’ll hear from Marlborough farmer Doug Avery, who’s been inspiring farmers around the country with the story of how he and his family rescued their farm from collapse after a series of droughts in the 1990s. . .

 

Let's look at taxpayer support for farmers in other countries via @abclandline. Norway leads the way – 60% pic.twitter.com/HhstSOvQ9t

— Lisa Herbert (@MsLisaHerbert) February 9, 2014

Now let's look at taxpayer support for farmers in Australia. Via @abclandline pic.twitter.com/WEnfUuqqyE

— Lisa Herbert (@MsLisaHerbert) February 9, 2014

Buy local here but not there

The chief executive of one of Australia’s big supermarket chains told an agribusiness dinner in Melbourne about its strategy to buy local produce.

It was, he said, a response to customer demand for Australian goods.

The supermarket was also going to go direct to producers, eschewing buyers in between.

It would, he said, be good for customers and producers.

The New Zealanders in the audience saw the danger in this and even the Australians weren’t entirely convinced of the scheme’s merits.

They liked the idea that they wouldn’t be competing with overseas producers but they’d seen how hard dairy farmers had been squeezed by milk wars.

Many of them were exporters and they recognised the risk, and hypocrisy, in supporting buy local at home when they would be wanting customers in other markets to do the opposite.

The Australian-made strategy is now hitting New Zealand producers as supermarkets stop buying are fresh and processed food.

New Zealand products are being stripped off supermarket shelves across the Tasman because of the aggressive Buy Australia campaign, says an organisation promoting local goods.

Buy NZ Made executive Scott Wilson says big Australian supermarket chains Coles and Woolworths are “systematically removing New Zealand-produced goods from their house brand labels simply for being non-Australian”.

Mr Wilson says frozen foods, cheese and fresh vegetables are among products affected.

“We have no intention of taking a protectionist stance by suggesting people avoid products that aren’t New Zealand made,” he said.

New Zealand supermarkets aren’t copying the Australian strategy – and given one is Australian-owned, it’s unlikely to. But there’s a very fine line between saying buy Kiwi-made and don’t buy imported goods.

. . . Prime Minister John Key addressed the issue today, which he says is against the spirit of trade relations with New Zealand.

“Even if it’s legally not [a breach of CER], it’s arguably a breach of the spirit of CER, and we’re going to be raising that with Tony Abbott,” says Mr Key.

“The whole spirit of CER is an integrated Australasian market, and we feel that the big companies in Australia should actually observe that. We can always retaliate but their market’s five or six times bigger than ours, so that doesn’t help us much.” . . .

Labour is huffing and puffing about the issue, but what would they do if Tony Abbott tried to tell supermarkets here what to do?

It is a contravention of the spirit of CER which has created a free market between Australia and New Zealand.

But removing tariffs is a government decision, it doesn’t impose requirements on businesses to buy imported goods or stop them only buying local produce.

New Zealand producers could organise a boycott of Australian-owned supermarkets here but there’s little else they can do.

The Aussie supermarkets are trying to sell the scheme as being better for customers and producers but it won’t be in the long run.

Australian customers will have less choice when they shop and that could eventually lead to having to pay higher prices.

They will  also less certainty of supply when, for example droughts or floods, affect production. When supply drops, prices rise.

Producers will find themselves locked into contracts as the weaker partner which will eventually lead to them having to accept lower prices.

There are good things to be said for buying local, and I do it when I can if there’s little difference in price and quality.

But that’s my choice and the Aussie supermarkets are taking that choice away from their customers.

There are also many good things to be said for free trade, for customers and producers who will be the losers if the supermarkets continue to swim against that tide for their own ends.

There is a lesson in this for the Buy NZ Made campaign too – it’s arrant hypocrisy to say buy local here but not there.

Rural round-up

Nutrient limits lift paperwork burden:

NEVER MIND the limits, it’s the paperwork that’s the real threat in regional council moves to cut nutrient losses and meet central Government’s National Policy Statement on Freshwater Quality, cropping farmers have been told.

That was one of three “slightly controversial” points Roger Williams of the Foundation of Arable Research presented to growers at FAR’s South Canterbury and North Otago trials hub field day.

Compared to dairy farms, cropping systems are hugely complex and data intensive and, as some at the field day confirmed, inputting data into Overseer as required by regional plans can take days. . .

Farm open day opens up the dairy industry:

Lincoln University Dairy Farm (LUDF) opened its gates on Saturday to the Canterbury public to showcase the operations of a commercial dairy farm, with 540 visitors taking the opportunity to learn about the transformation of ‘sunshine into food’. 

Visitors to the farm were able to get a glimpse into the complex world of modern dairy farming: looking at everything from the science behind photosynthesis, soil types; irrigation; fertiliser; grass and cow digestion; breeding; milking;  right through to the collection and transportation of milk and on-processing, finally reaching the many international markets the New Zealand dairy industry serves. 

New Zealand-based end users such as EasiYo and boutique cheese and yoghurt makers provided tasty examples of where the milk ends up, and Fonterra provided Primo and CalciYum milk drinks and Tip Top Fruju’s and Trumpets in return for donations for the Philippine’s Disaster Relief, raising $350. . .

Move over GPD: putting a wellbeing value on outdoor education:

Measuring economic value should mean more than just Gross Domestic Product (GDP). That’s according to Professor of Economics, Paul Dalziel , of Lincoln University’s Agribusiness and Economics Research Unit (AERU) who was speaking at The World Outdoors Summit in Rotorua last week.

Professor Dalziel argued for factoring in the idea of wellbeing to any equation which aims to measure economic value. More specifically, he was speaking with regards to wellbeing and economic value as it relates to outdoor recreation.

Although warning of the necessity for a cautious approach when allocating an economic value to the natural environment, Professor Dalziel did stress that the requirement for considering wellbeing within any such calculation stems from the idea that all economic value has a social dimension attached to it. The very fact that an individual may choose to walk the Milford Track, for instance, comes from a belief that the activity has a ‘wellbeing value’ associated with it. Otherwise the individual would not take up the activity. . .

The gap between consumer perceptions and farming reality – Mike Keogh:

If ever farmers needed reminding of the dangers of the ‘gap’ between consumer perceptions and farming reality, the recent decision by Woolworths to phase out caged eggs from its stores over the next five years has highlighted this risk. The decision, if implemented, will dramatically increase the disease risk faced by egg farmers, and also has the potential to have a much wider impact on biosecurity arrangements throughout the entire agricultural sector.

Woolworths recently announced it would stop selling caged eggs by 2018. It also announced that eggs from caged hens would not be used as ingredients for home-brand products from that date, although how this would be enforced (eggs are a major ingredient in pasta and noodles, a lot of which is imported from overseas) was not spelled out.

The biosecurity implications of this proposal were discussed by leading veterinarian Dr. Peter Scott of Melbourne University at the annual conference of the Australian Egg Corporation, held this week in Perth. He pointed out that the main source of Avian Influenza infection for Australian poultry farms is wild waterbirds. . .

Australian agriculture needs a brand and a brand champion – Mike Keogh:

If the pundits are to be believed, Australian agriculture is on the cusp of a boom that will rival the pound-a-pound wool boom of the 1950s. Rapidly growing Asian consumer demand for food, coupled with Australia’s close proximity to Asia has, in the eyes of plenty of commentators and policy makers, put Australian farmers in the box seat to experience a new era of sustained profitability and expansion.

But over the last five years, contrary to the above projections, Australian agriculture’s export performance in Asian markets has been lagging badly, relative to the performance of our major competitors. Australian agriculture has lost market share in all the big five Asian markets – Japan, Korea, China, Indonesia and India. And while Australian agricultural exports to Asia have been growing at around 8% per annum over the past five years, exporters like New Zealand, the USA, Canada and Brazil have experienced annual growth rates in excess of 20% per annum. . .

For our children – Milkmaid Marian:

Have you seen this?

Yes, it’s by Unilever. Yes, you’re entitled to be cynical and yes, I love it.

The global manufacturer and ice-cream maker has just accredited Australian dairy production as meeting its Sustainable Agriculture Code – a huge accomplishment, which is also a world first. Of course it doesn’t mean Australian dairying is perfect and Dairy Australia has published a Sustainability Framework that will nudge us all to do better.

Here on the farm, our family does a bite-sized project for the environment every year. We have: . .

Is buy local really best?

The NBR reports that New Zealand exporters will be hit by Woolworths’ Australia’s plan to stop importing vegetables for its own-brand frozen products.

The decision was driven by consumer demand for locally produced food.

This is a trend among better-off consumers everywhere and on the surface it’s appealing.

It’s not only charity which starts at home, business can too.

Why wouldn’t you support local businesses, employing local people, using local goods and services?

Local produce would be better wouldn’t it – fresher and more trusted?

The freshness argument doesn’t always stack up. Frozen and canned goods which are processed within a very short time of being harvested can be more nutritious than unprocessed fruit and vegetables which deteriorate more between picking and plate.

On the surface the other arguments make sense but the buy local campaign doesn’t take account of other factors including availability and price.

Local produce isn’t always at its best or available when it’s wanted nor is it always the most reasonably priced. Price might not matter to some people but it is the largest determining factor for many shoppers.

Australian producers will, at least at first, benefit from Woolworths’ buy local policy but there are risks for them too.

The supermarket wars which have depressed milk prices on that side of the Tasman could happen to other fresh produce.

Then there’s the hypocrisy problem for those producers who are exporters too.

They can’t argue in favour of buying local at home when they also want people in other places to buy their produce too.

The buy local policy will give Woolworths a marketing advantage but like a lot of policies based on emotion it might not be in the best long term interests of either producers or consumers.

Commerce Commission looking at investigating dairy prices

The Commerce Commission is doing preliminary work to determine if a price control enquiry into the retail price of milk is warranted.

A number of parties have laid specific complaints with the Commission about the retail price of milk and are calling for the Commission to hold a price control inquiry. . .

“A price control inquiry is undertaken in order to ascertain whether to recommend price regulation of a good or service. Goods or services may only be regulated under the Commerce Act if there is little or no competition, and if the benefits of regulation materially outweigh the costs of regulation. We do not undertake such inquiries lightly,” said Dr Mark Berry, Chair of the Commerce Commission.

There are potentially three market levels involved in the production of milk: the supply of raw milk to milk product processors, the manufacture and supply of milk products, and the retailing of milk products.

“The Commission intends to review the operation of each of these levels and consider whether it should hold a price control inquiry,” said Dr Berry.

The Dairy Industry Restructuring Act aims to ensure that independent processors are able to obtain raw milk from Fonterra at the price which Fonterra pays to its own farmer suppliers. This legislation plays an important role in ensuring contestability in dairy markets. The existence of that legislation would be an important consideration in any decision to commence a price control inquiry. Also important would be whether the increased prices reflect increases in the international price of milk products rather than a lack of competition in New Zealand.

In deciding whether a price control inquiry is warranted the Commission would also need to consider the level of competition between the two major town milk processors and the two major supermarket chains. The Commerce Act requires that there be little or no competition between these parties before regulation can be imposed. Such an inquiry would also need to address the likelihood of potential new competition.

It’s only a week since the Commission said it wouldn’t be looking into the price of milk but the change of mind isn’t a bad thing.

It isn’t launching an investigation, merely doing preliminary work to see if there should be an inquiry.

Dairy products, or alternatives, are important in balanced diets, especially for children, and the Commission’s findings will determine if there should be an inquiry.

Dairy prices are largely influenced by the international market. Higher prices mean we’re getting more for exports which is good for the economy though not so good for people shopping on tight budgets.

Federated Farmers research shows farmers get between 15 and 35% of the retail price of milk which doesn’t look like creaming it to me.

Meanwhile on the other side of the Tasman Coles and Woolworths are facing a Senate inquiry into the milk wars which started in January when Coles dropped its own-brand milk price to $1 a litre.

Hat Tip: Interest.co.nz