Mega Merge or Else……?Thursday, Jan 25, 2001
In November it was clear that deregulation of the Australian Dairy Industry was proceeding with devastating
effect on dairy farmer producers. Federal and State support funds had been made available
to cushion the transition but slowly the Aussie farmers woke to the fact that nobody cared if they
survived or not. Not even their fellow farmers.
The primary objective of the deregulators was to reduce the price paid for milk by the Australian consumer.
Six months into deregulation there is a growing sense of dismay and disgust as the hard truth
hits home. A handout does not compensate, does not equip, and does not restructure a family farming
In a news item below it spells out the dismal picture of an Aussie industry supposedly as efficient
as our own and it carries a warning to NZ dairy farmers. Get control of what you want to have happen
in the changes being faced up to in the Mega Merger or you will be facing the very same scenario.
Professor Neil Quigley seems to be a man searching for a scenario to fit his textbook market and competition
theories. His pompous pontificating on the need for competition is solely based on the principle
of divide and rule - you the producer should not have market strength because it disadvantages
Look who has creamed the advantage in the Aussie deregulation - the consumer? No the retailer. How does
the Professor's perfect market theories handle that as an outcome?
The primary driver for the single NZ dairy farmers cooperative is the need for a critical marketing
mass to enable the produce from the many small farm businesses to be competitive in a large volume
market where a few large retailer chains dominate the international food markets.
To load a small farm business down with all sorts of social and economic responsibility for this country,
such as being presented in the Professors report, is not a reasonable ask. Surely future benefit
flows from the things that we can do not the things that we wish we could do.
The management and organizational risks and responsibilities that will rest on the Mega Coop will be
severe and not without conflict and controversy. But that is a far better option than the potentials
for destruction of dairying skills, knowledge and wealth that lies in the Professors pogrom
The Professor is trying to invert the "sows ear into a silk purse" development of the dairy industry.
In the late nineteen fifties a prominent agriculturalist put the proposition "topdress the hills or
else…." And when it happened the country prospered.
Dairy producers now face "Mega Merge or else..."