Sharemilkers lack voice

By Philippa Stevenson

Dairy farmers who run nearly 40 per cent of the nation's farms and contribute an even larger proportion of milk production are being shut out of industry decision-making.

More than 5000 sharemilkers are largely voiceless.

They cannot vote on the mega co-op proposal to unite most of the country's dairy companies that farm-owning shareholders are about to consider.

Longtime Waikato sharemilking leader Jeff Bolstad is excited about the proposed changes - but admits that most sharemilkers feel like bystanders of the discussion.

"Over the years I've built up a relationship with company directors and industry leaders and I can have my say. But there's maybe 10 or 15 of us like that out of thousands," he said.

"Other sharemilkers feel left out."

Their predicament was brought home to many Waikato sharemilkers during debate over the recent merger between New Zealand Dairy Group and South Island Dairy Co-op.

"They haven't been able to participate because they haven't got the information from the companies. It was a shock for many to find they were a voice outside," he said.

Even so, the mega co-op proposal was expected to be a hot topic at this week's national sharemilkers' conference in Hamilton.

Mr Bolstad said the second major topic would be the future of herd-owning sharemilkers, because in recent years their viability had lessened.

"It will exercise minds that we are not in a business which is making money. Some will not get to see the promised benefits from the mega co-op in about five years," he said.

A farm consultant, Mark Robinson, who is to speak at the conference tomorrow, said critical evaluation was needed of the 50:50 sharemilking deal.

"It is often too much a master-servant relationship instead of a business one, and too short-term for the amount of investment involved."

Mr Robinson said joint ventures between farm and herd owners could overcome many of the problems of the 50:50 agreement.

An industry liaison officer, Mark Leslie, said 3500 sharemilkers had 50:50 agreements and 1700 had variable order contracts.

Between them the two groups ran 37 per cent of the country's 14,670 dairy farms. Because sharemilkers traditionally milked bigger herds as they raised equity to buy a farm, their contribution to milk production was high.

Mr Leslie said that in the past decade sharemilkers' cash surplus had remained constant despite rises in gross income. They had increased herd size by 30 per cent to maintain their income, but in recent years "realised the cost structure had got out of control."

Despite the challenges, Mr Bolstad said sharemilking "is not dead and buried." As land prices had eased a significant number of milkers had bought farms this year.

"But a group of sharemilkers will have to accept they will never purchase land, and I am one," he said.

More than 350 sharemilkers are expected to attend the three-day conference, which will culminate in the announcement of the sharemilker of the year from 12 regional finalists.

* Philippa Stevenson is based in the NZ Herald's Hamilton office: phone 07 838-2199; fax 07 838-0961; PO Box 19 172, Hamilton; e-mail philippa_stevenson@herald.co.nz