Gelignite might help dairy co-op merger

By GLENYS CHRISTIAN

Over the gate


When Bruce Tolich retired as chairman of Federated Farmers' dairy section he was presented with a plaque which neatly summed up his approach to the industry.

"This is a democracy and I am running it" was the slogan, and this straight-down-the-line way of doing things was fondly remembered at Mr Tolich's funeral recently.

Friend and fellow Northland farmer John Coleman recalled in his eulogy how the local community rallied round to help in converting the Tolich milking shed from the old walk-through layout to herringbone.

When sledgehammers had little effect on the floor, the helpers opted for half a stick of gelignite - with results well beyond what today's myriad regulation would countenance.

But wouldn't many dairy farmers like to use the same tools to speed up negotiations over the much hyped mega co-op?

All the talking between the New Zealand Dairy Group and Kiwi Dairies has moved the differential payment to be made by Kiwi suppliers from the initial suggestion of $1.60 a kilogram of milksolids, through a sticking point at 83c, to a much discussed 40c.

But still there is no agreement.

The Minister of Agriculture, Jim Sutton, has played along with the industry's wishes. He said the mega co-op enabling legislation could be extended beyond its September deadline if there is hope of the dairy giants' hammering out a merger deal.

Farmers anxious to receive the promised financial benefits, but kept happy by a great milk production season, would be prepared to let that happen as they can see a realistic shift in attitude.

But that is what is so glaringly lacking.

Single-company supporter Stuart Gower has even suggested that Dairy Group distribute capital to its shareholders so it can come into the merger on a more equal footing.

He would be loath to see this happen because it would lose faith with shareholders. They want company reserves built up to ensure the wellbeing of future farmer shareholders.

But if it came to the crunch and the two companies were in danger of going their own ways - which would inevitably mean overseas interests getting involved - the potential national loss could make such a concession necessary.

"It would be the lesser of two evils," he said.

This option has been studied by the Dairy Group, even down to the detail of how it could be funded. But directors apparently decided it would be irresponsible to go down that path when the door has not been closed on the merger and, subsequently, the mega co-op.

We need only recall their wounded reaction at what they considered a breach of faith when Kiwi won Northland Dairy Company as a merger partner in the middle of their earlier negotiations.

The fact remains that some Bruce Tolich-type leadership is urgently needed to turn the mega co-op into more than merely a concept which, while finding favour with most dairy farmers, industry heads are unable to bring about.

Mr Tolich is survived by his wife, Ivy, and daughter, Debbie.

But can the industry to which he gave so much time and energy survive the present impasse to remain New Zealand's largest export earner?

* Glenys Christian can be contacted by email at glenys@farmindex.co.nz