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Kellogg RT

Success of rural cooperatives.

Executive summary

This report looks at co-operatives as a whole. To gain experienced insight into the rural sector co-operatives a number of high level management and directors involved with co-ops have been interviewed. Essentially looking to define the mechanisms operating within co-operatives to ensure their long term success in the rural community.

The Co-operatives section covers what they are, differences between a co-operative and a traditional privately owned company, types of co-ops and why belong to a co-op. Then we discuss the success of co-ops and look at definitions from references and also individual co-ops. The ratios of shareholder vs cash buyer/suppliers of co-ops that were interviewed are shown in a graph. Asking them to define success firstly and then to express ways they measure success and how often these measurements are consulted. Innovation, markets and technology are forever changing and to keep business sustainable co-ops need to embrace these changes.

Co-ops don’t exist without the loyalty of their shareholders and it is one thing to join a co-op initially but what keeps a shareholder loyal and what measures do co-ops take when that loyalty is waivering? Also covered is the two way mechanism of co-op loyalty to the shareholder as that is often questioned by shareholders of producer co-ops when concerned about receiving income for their stock. The power of the individual versus the power of the co-op can be a very powerful factor and has been expressed time and again and can come from any section of the company. Some co-ops have said they place emphasis on it while others have less regard for this factor.

The decisions made by co-ops can be a turning point for them so it is important to understand how they are made, the process used and then also the accountability of those making the decisions. Finally the warning signs of co-op failure are covered. The interviewees have experience with co-ops both as shareholders and as management or directors so know the warning signs to watch for if their co-op is starting to struggle.

Sarah Heddell

Success for the Maori primary sector is success for all New Zealand.

Executive Summary

The present National Government has identified policy and priorities relative to the New Zealand’s economic outputs and opportunities. Within the set of priorities they further determined that the ‘Maori economy’ in particular has the ability to contribute significantly more to the overall economic strategy for New Zealand, both domestic and export. This view is reiterated and presented through government policy and subsequently by the various ministries including Treasury. This focus on the Maori economy is not new, however there is an increasing emphasis by this government and its political allies to ‘grow’ the Maori sector at a faster and improved rate to whatever other sectors it sits alongside.

Further to this the Government has set an ambitious goal for New Zealand; to increase the ratio of exports to GDP from the current 30% to 40% by 2025. This will require a concentrated effort to encourage investors to develop more internationally competitive businesses, in both the commodity and high-value technology-based sectors. Setting this goal ensures the Government remains focused on supporting the confidence and growth of our high productivity export firms (Hon. Ministers Joyce & English, The Business Growth Agenda, 2012).

The present National government instigated a Maori Economic Development Panel in 2012 . This panel is mandated to seek to improve Maori GDP per capita to equal that of the average GDP per capita by 2040. GDP contribution by Maori needs to be proportionate to the Maori population, ~ 15%, at the very least (Strategy 2040, Maori Economic Development Panel, 2012).

Research Question:

This report will attempt to answer the question: “Is the Maori contribution to regional GDP through agribusiness appropriately understood and quantified?”

For the purposes of this report it is necessary to first define the Maori Economy. The literature does not give a single definition however New Zealand’s Treasury have identified some clear parameters they use as defining the Maori economy through the Maori Asset Base. They state:

The Maori economy and asset base has grown significantly over the last 100 years. As such Maori and Iwi increasingly contribute and play a key role in New Zealand ‘s economy. Maori contribution to the New Zealand economy is multi-faceted and includes the primary sector, natural resources, small and medium enterprises and tourism.

…the government’s lead economic advisor is working with agencies across the public sector to support the growth and development of the Maori economy.

In 2001 the asset base of the Maori economy was estimated to be worth $9.4 billion, this figure rose to $16.5 billion by 2006, and we now estimate it was worth at least $36.9 billion in 2010. The Maori asset base includes:

  • Businesses of employers $20.8 billion
  • Other Maori entities $6.7 billion
  • Businesses of self – employed Maori $5.4 billion
  • Trust and incorporations $4 billion. (BERL (2010), The Asset Base, Income , Expenditure and GDP of the 2010 Maori Economy)

It should be noted that this definition of the ‘Maori’ economy specifically is drawn from political interests and does not necessarily meet the definition of those who identify as Maori and may or may not participate in the economy in the way policy and academics define. The Western worldview is somewhat reductionist and uses definitions to support a very specific understanding of terms and activities. Indigenous interpretations are generally more holistic in their definition, and, as an example, Maori would likely expect any definition of a Maori economy to somehow align to a cultural association ahead of any other factor. The policy definition of the Maori economy above will be held for this report.

Building a successful extension framework for livestock data link.

Executive summary

Livestock Data Link (LDL) is a new initiative from Meat & Livestock Australia (MLA) that aims to enhance the exchange and utilisation of carcase performance information by businesses within the red meat industry. LDL is a web-based application that links slaughter data from the National Livestock Identification System (NLIS) database with analytical tools, benchmarking reports, as well as LDL’s “Solutions to Feedback” library.

Up to 25% of cattle and somewhere between 30-65% of lambs in southern Australia miss their target market specifications at slaughter. Non-compliance of market specifications is costly to both the producer and the processor, making it one of MLA’s priority areas for improvement over the next three years.

Livestock Data Link will enable producers and processors to analyse carcase feedback information in relation to compliance to market specifications and performance outcomes will be linked to a libran./ of resources and solutions on how to address non-compliant issues on-farm. In the future the application will also be integrated with animal health statements to link with issues of disease condemnation or contamination.

Once LDL has been broadly taken up by the red meat sector it has the potential to increase compliance, reduce carcase value losses and potentially integrate with other systems that could help drive genetic improvement in herds and flocks.

At an industry level, LDL offers an opportunity to analyse feedback data to understand and measure carcase performance across the board and identify areas that can be targeted for increased education or R&D investment.

Although LDL is available for both sheep and cattle carcase analysis, the investigation and findings of this paper will be focused on the beef sector. However, it is likely that my findings will be transferrable to the sheep sector.

Penny Schulz

Intensive off pasture dairy farming: is it sustainable.

Executive summary

Dairying remains New Zealand’s largest and most successful industry. A growing global population and higher rates of urbanisation have largely contributed to increased demand in milk globally. Current demand has driven the market and led to continued dairy development and conversion of land use to dairying within New Zealand. This intensification has placed significantly increased pressure on the use and subsequent deterioration of natural resources, particularly freshwater quality.

The challenge of economic prosperity verses environmental protection remains a contentious conflict. Ambitious targets set through Central Government to both double the value of agricultural exports along with significantly improve the impact of dairying on the environment has put the dairy industry further under the microscope. It is unlikely future production growth will be achieved through large scale land use change due to more stringent regulations. So the question remains, how does New Zealand’s dairy industry remain globally relevant while decreasing its environmental impact?

One such consideration has been that of intensifying existing farm systems through the introduction of off pasture cow housing facilities. A much higher milk production is generally reflected through such systems as a result of introducing additional supplementary feed which is better utilized by the receiving stock. This report focuses on intensive off pasture dairy farming and whether this can be undertaken sustainably as a long term practice. Sustainability has been considered holistically as incorporating economic viability, environmental responsibility, social acceptance and cultural sensitivities.

Economically, a higher cost of production along with a higher capital investment to incorporate the required infrastructure has led to lower profit margins being achieved on farm, this is particularly evident during low pay-out seasons. The increase in debt to enable the development of off pasture housing also erodes the equity which farmers have in their land. The ftlrther lack of cost control on external supplementary feeds is also likely to push the prices upward as demand for high quality supplements grows. These factors demonstrate how difficult it is to compete with the more efficient intensive farming systems operating within the Northern Hemisphere.

Environmentally, the concept of taking cows of pasture is well documented as a mitigation tool to reduce nitrogen leaching associated with direct deposition of urine to pasture. If off pasture systems were incorporated purely for environmental reasons and no subsequent intensification of the system was undertaken for economic purposes they would undoubtedly be environmentally accountable. However the trend of subsequent intensification which follows the development of animal housing make the practice questionable at best.

Socially, New Zealand farmers are historically skilled pasture managers and often these skills are not easily transferrable to the more complex off pasture systems. The current demographic and level of intellect within the dairying community would not support a large scale shift to more intensive dairy systems. Equally the nostalgic value that New Zealand society puts on pasture grazed cows compared to the widely misunderstood “factory farming” housing systems would also be a challenge for the industry if more farmers went this way.

Culturally, further understanding is yet required to formulate a comprehensive picture of the sensitivities associated with intensive farming. However the tension between commercial ambitions and environmental protection will likely be an ongoing conflict.

Based on these factors it has been concluded that intensive off pasture dairy farming is not sustainable if it was to be encouraged throughout the dairy industry. Stronger leadership to encourage further focus on per cow production rather than the historic per hectare production is required to achieve both the economic and environmental ambitions of New Zealand. Once this has been achieved more thought should be applied to how the dairy industry market their product globally. Additional value should be attainable on the basis of New Zealand’s pasture based systems and the positives that consumers associate with a “clean green free range” product. It is time for New Zealand to cas i on its reliable export history and strong focus on customer relationships to establish market premiums for the uniqueness of this product which remains globally unparalleled.

Doug Dibley, Dibly, Douglas

Leadership for future agribusiness: real world insights.

Executive summary

To achieve industry growth targets, Government and Primary Industry strategies have signalled the need for change. For example there are calls for greater collaboration, scaling up, more innovation and improved productivity. The key to success will be commercial leadership. Individual enterprises across the value chain will need leaders and senior managers with the capability and style to spear head change. They make the decisions, have the resources, and implement. The challenge is to translate the elevated industry goals and aspirations into commercial reality, and to migrate these into the mainstream so that they become the norm.

The central question to this study has been: What leadership and top talent management do agribusiness leaders and managers require to move their individual businesses into top performance to grow the industry for the future?

There is an enormous amount of research and literature on leadership, talent, leadership development and talent management as well as a multitude of models theories and concepts around competencies, styles and good practice. Rather than take a pure theoretical view, I was interested in obtaining perspectives on leadership from those at the coalface who are weaving their way through the complexity and challenges of this century’s business. To do this, I interviewed and surveyed ten recognised leaders of significant companies, mainly within the horticulture industry. I used two pieces of leadership research that lent themselves to exploring leadership for results and for transformational change with a particular focus on the impact of organisational climate and emotional intelligence.

The purpose of this study has been to inform those making decisions around leadership development and to catalyse new thinking and action for transformational change.

In summary, nine themes on leadership for future agribusiness and nine recommendations as to what to do about it can be drawn from this study:

The Nine Themes
  1. Transformational change is on the agenda and developing more transformational leader ship is a commercial imperative for the businesses in this study.
  2. There is a leadership gap and the strategic theme of  “Identifying and developing talent“ has become a top priority.
  3. There is a shift away from the old command and control and the “Great Man Trait” approach to wards transformational leadership and associated behaviour. Tapping into hearts as well as minds will take companies much further ahead.
  4. Given the nature of the business, however, the transactional mode is still a commercial imperative.
  5. Entrenched paradigms and associated business practices such as old style performance measures still drive a less than ideal transactional culture.
  6. Agribusiness has the opportunity to develop unique transformational cultures by blending family-based values and approach, with the disciplines and pathways of scale and/or corporate management.
  7. Effective leaders of the future will develop and use a mix of styles and competencies and these need to be different to what is currently there (more transformational, a lot less “laissez faire”, more authoritative and less coercive).
  8. Young people and women are an under-utilised resource. Encouraging diversity and the associated different styles could accelerate the transformation the Chief Executives (CEs) are looking for.
  9. With the exception of a couple of the companies where some outstanding and exciting new activity is happening, the majority of leadership development is still quite adhoc. My general sense is that there is now a lot of opportunity to work on the “HOW”.
Recommendations

My recommendations for companies and commercial leaders to accelerate transformational change are:

  1. Align your leadership at the top, however, put a much higher focus on proactively identifying and developing your leaders across the entire company.
  2. Build your company culture around the unique mix of grounded family – based values and the rigour and opportunities corporate management offers. Find your “sweet spot”.
  3. Cultivate a mix of styles across the company: the CE, senior and middle managers (more transformational, a lot less “laissez faire”, more authoritative, more coaching, and less coercive).
  4. Have a stronger than ever focus on performance but move away from the Great Man trait and command and control mentality.
  5. Develop a more sophisticated and integrated approach to talent management. This will include:
    • more HR expertise ( either internal or external),
    • taking a whole – systems approach linking company strategic directions to HR as well as training and development,
    • advanced recruitment and selection – companies need to become talent scouts,
    • considering different incentive and performance systems,
    • proactive succession planning, pipelining and transitioning,
    • adding more basic management training to your development budgets, separate to leadership development,
    • much more input by the company and its managers before and after training interventions. Have a go at high impact learning principles,
    • greater focus on behavioural concepts such as emotional intelligence and organisational dynamics understanding that transformation is a process, that there pitfalls to each stage of that process and avoid those pitfalls,
    •  a higher priority to develop personal and interpersonal capabilities at all levels.

6. Tap into your young people – find more leadership roles, nurture and develop them.

7. Engage more with women and be open to their different way of leading, thinking and doing things.

8. Consistent and increased investment through good times and bad will be critical.

9. Equally important, irrespective of size of company or the amount of resource available, will be investment by the agribusiness leaders themselves. The impact of how they individually behave and foster “the way we do things around here” both at a strategic level and on a day-to-day basis cannot be under-estimated.

Next Steps

This project has been one of thought leadership. It has signalled that “talent” and developing talent“ is a commercial imperative and provides deeper insights into leadership and building a culture for change. From here there are three things to do: tell the story, refine the data, and empower commercial organisations to step up into transformational mode.

 

Opportunities and barriers to improving staff rosters on Waikato dairy farms.

Executive summary

There are a large and varying number of roster options in the dairy industry. Over time Canterbury and Southland have become predominant dairying regions which are often seen to run shorter rosters with more staff. Some Waikato dairy farms are still seen to run very long rosters on-farm providing staff with limited time off.

The purpose of this study was to investigate how current roster systems on Waikato dairy farms were established and to seek information on areas for improvement. The research aimed to identify key drivers for change and understand how these drivers could be used to improve rosters for the benefit of employers, employees and overall business.

Promoting better rosters on Waikato dairy farms would have a number of benefits not only to the industry but also to local communities. Shorter rosters would improve on-farm health and safety, staff welling, allow better social balance, retain employees within the dairy industry and the Waikato region and bring new talent into the industry.

Lycinda Lett

Single point of entry

Executive summary

Single point of Entry or SPE, three letters that create so much discussion, divide opinions and have provoked heated debate and conversation for so long.

For better or for worse the New Zealand Kiwifruit Industry is extremely unique as the only exporting industry in all of New Zealand that is regulated by the government so that there must be only one exporter of Kiwifruit around the world with the exception of Australia.

Everyone that I have spoken to has an opinion, they all have views on how the SPE should operate, how ZESPRI should operate and whether the SPE should be deregulated or not.

Brendon Lee, Brendan

Farmer adoption of scheme supplied irrigation water

Executive summary

The reasons for uptake of irrigation scheme water are relatively un-researched in Canterbury of New Zealand, and while there are a number of theories why scheme water is not adopted by farmers, it is not well documented.

This pilot study of nine farmers across mid and central Canterbury was set up to make an initial insight into the reasons why farmers do and do not adopt irrigation from scheme supply in attempt to provide some information to developing irrigation schemes to how they might better serve the needs of the farming and wider community to ensure a more successful scheme.

Of the irrigated and non-irrigated farmers interviewed, the prominent motivations for the adoption of scheme water are financial and lifestyle driven.

Mark Everest

Canterbury Land and Water Regional Plan: Is It Equitable? Is There an Alternative Solution, Focusing on Agriculture.

Executive summary

The Canterbury Land and Water Regional Plan (CLWRP) is currently one of the more topical issues in the agriculture community. Please refer to Appendix one for an illustrated description of this plan. The proposed plan as it stands could potentially have huge implications on farm succession, development plans, change of land use, retirement plans, viability of individual farming enterprises and a number or combination of these factors could divide local communities.

I believe that the majority of New Zealander’s (especially farmers) want to protect their land and water ways. As they want to bring their families up in New Zealand’s wonderful rural communities’. Water has been and always will be a major part of any community.

The intent of the proposed CLWRP is 100% correct – no arguments. But the current mechanics and how it is going to be monitored is potentially flawed from the start. I respect that there has to be a “closing of commons” and with any strategy, it will cause some pain for a particular party.

Both Rural and Urban communities need to work together and have an invested interest in cleaning up our water ways as both these user groups need water of the highest quality.

In this report I have given some background on the CLWRP, how it is monitored, by whom and by what method, an overview of the nitrate leaching, three live examples of how this proposed plan could affect each farming business, and lastly provide a potential alternative way of both urban and farmers collaborating together to improve water quality.

This reports purpose is to identify if the CLWRP plan is equitable to all farmers, which will include looking at a potentially more equitable alternative.

Simon Cooney, Coony

OVERSEER® nutrient budgets: An unsung hero.

Executive summary

The OVERSEER® Nutrient Budget model (Overseer ) has developed significantly since its inception in the early 1990’s. The model has been widely accepted as an appropriate tool to aid fertiliser nutrient management decision making , the function that it was designed for.

Regional councils are starting to use Overseer as a regulatory tool, to meet the requirements of the National Policy Statement for Freshwater Management. Given this, the model has come under more scrutiny, particularly examining how the limitations of the model apply in a regulatory framework. This additional scrutiny has led to changes in the perceptions of Overseer by users.

The purpose of the report is to provide insights into the perceptions of Overseer, what influences these perceptions and why? This was achieved through the completion of 35 interviews. To enable the author to analyse a range of views, interview groups included d airy and drystock farmers from the Waikato, farmers facing nitrogen regulations, agricultural consultants and regional council staff.

The main findings of the survey were:

  • Age and past exposure to the Overseer model are key influencers on farmer’s current perceptions.
  • The users of Overseer are key influencers of farmer perceptions, understanding and acceptance of the Overseer model.
  • The accuracy of Overseer mode l output is viewed to be influenced by a number of factors, including accuracy of data supplied, consistency of file creation and the limitations of Overseer to model complex farm systems.
  • There is a real concern across all sectors of the future use of Overseer in regulation, at its current perceived level of accuracy and credibility.
  • The Overseer model is effective at completing the tasks that it was initially designed for, that being to aid on-farm nutrient management decision making.

The project highlights that there are measures that if implemented successfully, would significantly improve the perceptions and the level of confidence in Overseer. A number of these issues are already identified in the Overseer Strategic Plan and would be addressed through its implementation.

Through the investigations of the project the following recommendations should be considered for implementation:

  • Significant investment in science to increase the credibility of the current model output and allow for the acknowledgement of future on-farm mitigation practice change.
  • Increase the acceptance and understanding of Overseer with the users of the software through:
    • user friendly web site upgrade
    • timely communications
    • increases in pre-release testing to reduce bug fixes.
  • Greater communication to the wider industry to promote investment, science and technology changes that have been made to improve Overseer.
  • Greater incorporation of Overseer into farming system decision making processes, to increase the value of the software as “more than a regulatory tool”.

Suggested developments include:

  • More streamlined and automated data collection.
  • Links to other farm programmes such as FARMAX and Udder
  • Development of Overseer to create spatial representation of data, such as the MitAgator tool currently under development by Ballance.
  • A two tier nutrient budget model to inform on farm decision making for compliance and non-compliance activities.
  • The release of farmer tailored orientation workshops to improve farmer understanding of the Overseer model.

The wider industry can also contribute to improving the perceptions of Overseer by:

  • Improved awareness by the farming community, facilitated by both regional councils and industry to highlight and gain acceptance to the causes, issues, contribution and solutions to regional water quality issues.
  • The implementation of improved data collection processes nationally by initiatives such as data locker.
  • Improved on-farm data collection to meet the requirements for the reporting of N loss and N use efficiency as part of the Sustainable Dairying: Water Accord obligations
  • Clear guidance provided to farmers from regional councils, as to how Overseer will be used to inform regulation in their specific region, including future Overseer version changes and accounting for on-farm mitigations that are unable to be modelled in Overseer.

The Overseer owners are faced with the challenge of developing and gaining acceptance for the model that is now being used that for a purpose that it was not initially designed for. To achieve this, significant increases in – buy are required from the farmers that it will ultimately influence.

If this can be achieved, then t his will enable the Overseer model to be seen as part of the solution rather than part the problem. In short, Overseer can be the unsung hero, if time and resource is made available to allow Overseer to meet the demands of a new regulatory era in nutrient management.

Adrian Brocksopp