Fonterra has a huge challenge to get back into shape. Photo / supplied
COMMENT:
Back in the day, I expended enormous amounts of energy kicking Fonterra when they were "up". Now that they're "down", there's really no need. The attack dogs have arrived, and all I can do is watch the ripping and tearing of flesh from a distance.
Every man (and his dog) is having a slavering lash at the dying of the Fonterra dream. It's almost as if they didn't see it coming, ain't it?
The anger, recriminations, and blame are pouring out in screeds of anguished torment from pundits who, in many cases, have spent years not seeing the patently obvious — that the HMS Fonterra was heading toward the rocks.
Back in 1999, I was president of Wanganui Federated Farmers. This was both pre the official "h", and the 2001 launch of Fonterra.
As an agri-political group of farmers, we spent an exorbitant amount of time discussing the pros and cons of backing such a huge monolith, and amid ginormous pressure from industry leaders, politicians, and lobbyists. We pretty much knew it was going to happen, but we thrashed it out anyway.
My memory of those days around the table was one of unease. What if the projected scale of market access means the opposite is true? What if creating such a monster ultimately sees it lumbering around the laboratory kicking over the milk cans and causing general mayhem? What if dairy farmers end up in a far worse position financially?
But, c'mon, it's a co-operative! It sounded positively socialist. How could things go wrong?
And, you know, it seemed like a good idea at the time. Just like America. On paper, and in written constitutions, they generally do. My how things have changed.
Just as the Second Amendment's "right to bear arms" never foresaw the epoch of the military-style assault rifle, Fonterra never foresaw that the giant it would fast become wasn't going to be quick enough on its hulking feet.
Yes, leadership was a problem. Successive CEOs did not encompass the talent and attributes required. Yet blaming the "greedy Dutchman" is an all-too-easy scapegoat.
All CEOs are appointed by governance, and how Fonterra's governance performed on that score — and mostly all others — is where much blame lies.
Hate the exorbitant bonuses paid? Ask the directors about it. Ask them about everything.
The men they thought best suited for the top job was borne of a belief — until recently — that overseas expertise was superior to homegrown any day of the week. Hopefully that thinking will be the last gasp of our legendary Kiwi shoulder chip.
Over the past almost two decades the mistakes have been Herculean. We all know what they were — DCD, the botulism scare, melamine, multiple bad investments — but it's the more surface, seemingly innocuous stuff that's caused damage, too.
Their marketing and branding made many a skin crawl. The use of Richie McCaw as their "face" was always designed to get the "average Kiwi" on board, and to take heat out of the fact that Fonterra oversees New Zealand's largest industry polluter.
From dirty dairying to greenhouse gas emissions, the dairy industry is number one by a country mile.
Richie's beaming smile and "good bloke" persona was worth every cent he was handsomely paid.
If you blindly adore the All Blacks on the field, you're gonna blindly adore his presence on the cow field, too. It was so nauseatingly patriotic as to be brilliant. And to this day, it has massively aided the delay in dairy farming owning up to its responsibilities to the environment it operates in.
While it's a pretty solid bet that life just got a tad tougher for the management and executive of Fonterra — a massive financial loss has a way of doing that — my concern is with the price takers. The price makers can stew in their own sour milk for all I care.
Farmers will be going through the many stages of grief right now. They've been sold a line on endless growth and, with it, the consumption of more off-farm feed supplements, fertiliser, loans, and cows.
Basically, they've been let down by their failing co-operative, farming leaders, banks, politicians, and DairyNZ who've all encouraged them to borrow more, consume more, compete more. Where's it got them?
New Zealand's farming future is now more precarious than ever.
Fonterra still has a slim chance of slowly turning their creaking, overladen ship away from the jagged rocks of climate change, environmental woes, indebtedness, and public impatience.
But it'll take something from the crew we've not seen before. A solid, unwavering grip on the helm of reality.