Meat & Wool NZ releases new levy proposition

Meat & Wool New Zealand releases new levy proposition

Meat & Wool New Zealand has finalised its levy proposal for sheep and beef farmers after an extensive consultation process that began in April this year.

Meat & Wool New Zealand Chairman, Mike Petersen said he believed farmers would see that the organisation had listened and responded appropriately to many of the concerns raised in the consultation round. Importantly, the proposal has been unanimously supported by all Directors of Meat & Wool New Zealand.

“Farmers told us that they are prepared to invest in their industry, and there was strong support for the activity areas discussed in the consultation round. However there were some caveats alongside this support, including the need for increased funding from companies in market development, and also a plan to access the Government funded Primary Growth Partnership (PGP) where matching funding is available to accelerate innovation programmes.

“There was widespread recognition of the lack of a sector strategy and farmers have asked us to take a leading role in ensuring that this work is completed. Farmers are feeling more confident about sheep and beef returns for the coming season, but they want us to do further work alongside the companies to ensure these better returns are captured and secured over a longer period of time.”

The final proposal reflects concerns raised by farmers in the consultation round that the levy ranges contemplated in the discussion document were too high and would not be supported.

Meat & Wool New Zealand is proposing to fund the next five years of activities from a combination of greater meat company contributions, funding from the Government’s Primary Growth Partnership, some capital from the New Zealand Meat Board reserves and a smaller stepped increased in levies over the next five years.

“We have tried to strike some balance in the proposal given the wide ranging views that were presented to us during the consultation round. Importantly we have outlined clearer objectives for the organisation, how the activities are going to be funded and how farmers can measure the organisation’s progress.

“While we accept that not all farmers will agree with everything in the proposal, it is important that if they agree with most of what is proposed for the next five years, that they vote yes and ensure the activities continue.”

Mr Petersen said farmers will want to know what is different in this proposal, compared to the ideas set out in the discussion document, issued in April.

“They will see that the activities have become more focused into three programme areas – Farm, Market and People.”

Research & Development and Extension are part of the “Farm” programme; Market Access and Advocacy and Market Development come within the “Market” programme and the “People” programme includes Skills and Leadership.

“Farmers will see when they receive their copy of the proposal in the next fortnight that Meat & Wool New Zealand is proposing to work within a total budget of $36-37 million, which is well below the $39-46 million range per annum suggested in the discussion document. In fact we have pruned the budget so that expenditure will be the same as this current year, even though stock numbers are down and there will be less interest from the New Zealand Meat Board Reserves.

“Specifically in the levy-funded R&D area we have trimmed $4 million and in Market Development for meat, we will spend $4 million less than originally suggested.

“We have signalled that we will be looking for a greater contribution to meat market development activities from meat companies, and if we cannot achieve that in the first two years of these levy orders, we will reduce our spend in this area.

“Farmers were polarised in their views on whether or not to invest in market development for wool. In spite of us expressing the need for a commercial solution, there was a strong message from farmers that we needed to play a more active role to assist the industry to transition to this model. Meat & Wool New Zealand is proposing to provide some limited market development funding for the next two years, aimed specifically at encouraging the full implementation of the Wool Industry Network Strategy. On that basis, the wool levy will reduce to four cents a kg for the next two years and is likely to further reduce to three cents for the remaining three years.”

Current levy rates are:-

$0.40c per head for sheepmeat
$3.60 per head for beef
$0.55 c per head goatmeat
$0.0525c per kg wool and $0.02 per kg dags

Separately, it is proposed that $26 million be used from the New Zealand Meat Board Reserves to attract matching funding from the Government’s Primary Growth Partnership for new R&D.

Mr Petersen said this would be specifically for new innovation projects for the sheep and beef sector, and it would be subject to the approval from the New Zealand Meat Board.

Mr Petersen said feedback was overwhelmingly in support of the current makeup of the boards of Meat & Wool New Zealand and the New Zealand Meat Board. Farmers wanted to retain the farmer-elected directors with three wards in each island and two meat industry nominated directors for Meat & Wool New Zealand. They also wanted a retention of the status quo for the governance of the New Zealand Meat Board.

Farmers will be receiving the proposal document and their voting papers in the week beginning 3 August and the voting period runs until 2 pm on 28 August.

Mr Petersen said with the proposal finalised, he thought it was important farmers hear what the organisation was planning. Those who want to look at the document, before they receive their voting pack in the post, can read it online by visiting the referendum website www.referendum09.co.nz or www.meatandwoolnz.com

ENDS

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