Mega effort wanted from top to bottom of sector

By PHILIPPA STEVENSON

Dairy farmers waiting to hear how the proposed mega co-op will boost their returns have learned for the first time that they, too, will be expected to deliver.

Yesterday, Dairy Board chairman Graham Fraser told farmers at the Dairy Expo in Hamilton that a 15 per cent annual growth in sales revenue and 15 per cent return on assets were targets designed to increase profits under the proposed integrated industry structure.

As well, yearly productivity gains of 4 per cent had also been targeted in three areas - factories, marketing and on farms.

Mr Fraser said farmers would be helped to reach their target with a new "centre for excellence for farm productivity" which would be funded directly by them.

Board general manager of corporate development Chris Kelly was startled to learn the plans had been made public but confirmed a project teams' recommendations on the plan were set to go to a steering committee tomorrow, chaired by Mr Fraser.

"We're looking at creating an industry-owned centre for excellence to perform generic, and non-proprietary research and development which will assist farmers increase their productivity," he said.

In a deregulated environment in which the board would no longer exist and its replacement would not represent all farmers, the centre would have to be funded by a direct farm levy, Mr Kelly said.

The amount required had not been calculated but there was currently around $25 million spent on industry good services including disease control, training, and the consulting officer service.

A definitive list of what should be funded would be included in this week's recommendations to the steering committee and farmers were likely to be asked to stump up with the money this year.

Legislation enabling the industry to restructure has been enacted but lapses on September 1.

Mr Kelly said by then, "we need to have our ducks in a row and the situation clear enough so we can go to farmers and ask for a compulsory levy to fund us. That will have to be during this calendar year."

He said the research centre would be "a physical being" but declined to say where. However, the Hamilton-headquartered Dairying Research Corporation already receives major board funding and, according to its annual report, has been developing its Newstead site as a "platform for a national centre for excellence for dairy farm production research."

It also has a research station in Taranaki and an industry source said the new centre was likely to hinge on the corporation, "with a few little clip-ons."

Mr Kelly said farm productivity targets, which were environmentally sustainable, had been developed and extension services such as the Livestock Corporation consulting officers would help farmers apply best practice knowledge across the industry.

From this year farmers would be surveyed annually to measure success in meeting the targets, he said.

Details of the proposal were likely to be sent to farmers soon after tomorrow's meeting.