Agents, merchants react to wheat co-operative proposal

Press, 25 October 1985, Page 22

Agents, merchants react to wheat co-operative proposal

The stock and station industry has urged wheat growers to be wary of joining a new growers’ cooperative because it believes it cannot match the services offered by stock and station companies. The general manager of the N.Z. Stock and Station Association, Mr Vince Connolly, has said the emergence of the co-operative is unnecessary. “We recognise that in a free market anyone has a right to compete for the growers’ custom. But we also believe that to do so a newcomer must offer posi-

tive benefits, and the Farmland Grain New Zealand Society, Ltd, doesn’t measure up. “Our members have given free technical advisory services to growers for over 130 years, covering every aspect of farming. “They have been foremost in introducing new technology into grain growing through the application of extensive research activities. Improved and special purpose seeds have been developed which have benefited both quality and productivity.”

There is no indication that the co-operative has the resources to be able to provide equivalent services. He stated that if growers switch from stock and station companies to cooperatives the viability of free advisory services will be jeopardised. “The wide income base available to stock and station companies pays for advisory services. If this is eroded, the companies may reconsider the provision of on-farm, assistance.

“With the Ministry of Agriculture moving towards a ‘user pays’ policy on services it is more than ever in the interests of growers to retain our technical input,” he says. Mr Connolly also criticised the Farmlands proposal for a national grain pool. He said this would severely disadvantage growers of quality grain by equalising prices. Deregulation of the wheat industry should encourage growers committed to producing quality and maximising returns, and a national pooling arrange-

ment will work against this objective and against growers’ interests. He said that the apparent basis on which the co-opera-tive has been formed is to provide a price setting group to counter market denomination by flour milling interests. This is totally unnecessary, as the record shows. Stock and station companies comfortably handle the interests of growers supplying the million tonne annual grain crop. The addition of a 300,000 tonne wheat crop on to the free market will be handled in the same way as all other grains. “The fact is that our livelihood depends entirely upon the livelihood of our grower clients. That interdependence is exactly why we have a commitment to getting the best possible deal for them.” He added that recent Australian experience has shown that grain co-opera-tives have a record of failure. Two have collapsed due to mismanagement result-

ing in the growers losing their investment and incurring substantial debt.

Mr David Thomas, of the Agriculture Merchants Federation, said the member companies were committed to an ongoing milling wheat industry in New Zealand. They were suppliers of inputs to the wheat industry, such as advice on correct cultivars, sowing rates, times of sowing, weed, disease and pest control, harvesting techniques, crop sampling, storage and drying and sales to the feed and flour milling industry. “With the new wheat quality index system, which is basically payment for quality, growers must adjust to higher wheat quality rather than going for optimum yields,” he said. “Merchants are geared to the new free market situation and know that growers will supply to the company which gives the best service and advice in what is already a very competitive industry,” he said.