Being Responsible for the EnvironmentThursday, Mar 13, 2003
Fonterra is well down the path of setting its own environmental rules for the right to supply milk. Is this just an extension of the old shed and plant inspections or is the coop getting sucked into an area that would be best left to the responsibilities of the “public good” organisations such as regional councils to manage for the total good of the community rather than putting the responsibility on one sector.
Setting and meeting environmental standards are in the interests of the whole community. For where is the equity if a well managed high quality rural environment is degraded by the effects of lower environmental standards often tolerated for urban environments.
The fuzzy marketer’s promotional cry of “clean and green” being the unique selling proposition of NZ dairy products has long since been bastardised by every other food exporting country of the world making the same claim.
Sustainability of farming practises should be the first objective, clearly communicated to customers, of any self imposed environmental rules. Seeking to position an industry to match the fickle whims of consumers who have a selective perception of realities of nature will lead producers down the road of ever marginal demands
It is the consumer’s illusionary image of goodness flowing from things clean and green that that seems to underlie the marketers request for a better environmental standard on dairy farms. However the marketer needs to be discerning in defining the Coop’s customer. Is the commodity customer seeking the same standards as the retail customer?
One wonders how marketers will manage when the environmentally astute consumer realises that milk is produced from an udder just a few inches from the waste exit end of an animal. How will the market react if it perceives that milk is a wholesome food produced in a public lavatory? Will they point out this reality to the customer as being a state of nature or will they request that milk be produced from a redesigned more ascetically acceptable cow?
No quantification of the average cost per farm to comply with the proposed new standards has been estimated but even if it averaged a one off cost per farm of $10,000 it totals $150,000,000 of expenditure or income forgone. Will the marketers be better positioned as a result of the new environmental standards to recover a return on that sum from the market?
In its haste to become a consumer orientated marketer Fonterra has to take care it does not set standards for itself that are economically unsustainable.