Wednesday, August 28, 2013

Agresearch: Should I stay or should I go?

I have been reading the various articles on the pros and cons of the proposed AgResearch restructuring which intends to centralise most of it’s’ capabilities to Lincoln and Palmerston North.

Centralisation and then decentralisation is something that seems to go in cycles, governments, banks and significant businesses have all done it.  You get someone new at the top and they want to make a change.  Centralisation tends to be economically rationalised by lower admin costs, more cost effective use of physical assets (in theory at least), scale efficiencies and so on.   Then 10 years later decentralisation is rationalised and justified on better client service, we need to be where our customers are, personal contact is what makes the difference, I am sure there are many more ways of justifying both actions.

 The reality for me is I deal with people, if you deal with someone you like and trust, and they shift to another entity in the same business then I find I tend to follow them.   My loyalty is to the person and not the business, so if they leave the industry I am looking for someone else who I trust to deal with.   Most business is all about relationships.  I would suggest the importance of this is being overlooked at the moment and/or immensely undervalued in the proposed restructure.   

 These relationships are even more important when carrying out industry good research as you need to have good solid direct working relationship with those you are in theory developing the science for, you need people with a foot in both camps who understand the practicalities of what is happening and what the industry is wanting. 

 What do I mean by this, two people I deal with at AgResearch at Invermay with regards to sheep genetics, are both married to farmers and live on farms, they understand the challenges and the realities of what is going on and I would suggest empathise with the industry.  Will they relocate, the odds must be against it.  People like them are important to ensure research is followed to its logical conclusion or further developed if required.    The cynic in me believes that sometimes funding is sort for projects which is more about keeping someone in paid employment than attaining industry good objectives, because when the funding runs out, the project is shelved and they move onto something else.  

 It’s important to have people in all regions that are easily accessible to the farmer, the better the relationship I suggest the better the science being undertaken and of course the better the buy in to the research by the farmer.  Centralising AgResearch’s capabilities will severely impact on this as it would be inevitable that there would be many more scientists undertaking research who would have little or no contact with the actual farmer themselves.  In other words centralising scientists at Lincoln and Palmerston North I believe will create a greater disconnect with the farmer.  I often cheekily say when describing a scientist I have some time for, they could probably almost succeed as a farmer if they wanted to (this is because they understand the practicalities and realities facing farmers, not all scientists do, they only way they can get an inkling is by forming good relationships with farmers and similarly for farmers to understand the science). 

 On top of this to create the relationships I am talking about you need to be where the subject of the research is: if it’s about sheep then pick an area where there are considerable sheep, Canterbury as we all know has a huge dairy presence now, so centralising to Lincoln, doesn’t really stack up that well for sheep research.



Thursday, August 1, 2013

Closed door talks insult Farmer suppliers

Who decides the future of the sheep industry?
I didn’t want to write about this anymore, but the recent article in the farmers weekly “Meat talks near end” incensed me to write about it again.  

I know I can only speak for myself but I have to say I have been disgusted with the arrogance, I guess you would call it (perhaps even ignorance, or condescension or all these things) of the meat companies.  They are treating us as if we are kids who should be seen and not heard: you just wait there and we shall talk amongst ourselves and once we have agreed on what is best for you and us, we shall then tell you what is going to change!!!!!.  No, it’s alright farmers and shareholder suppliers we don’t want your input as to how things should change or care exactly what you want, we are the experts, we know!!!!   I am afraid this is how I feel and especially so about the two cooperatives, all of them must answer to their shareholders, but the cooperative shareholders are also their suppliers, who in theory they are supposed to work in the best interests of.  Private companies can do what they like, but cooperatives?

At the very least you would think that you would invite the current executives of the Meat Industry Excellence Group “MIEG” to partake in the discussions given their recent road show meetings around the country, but from what I have read they are not part of it and have no idea of what the Meat companies have been talking about.

The stock response for justifying private, confidential closed door discussions is the information is commercially sensitive, which occasionally rings true, but more often than not in my experience it’s simply an excuse to exclude the public or other interested parties.   I doubt very much they are discussing balance sheets, debt loadings etc, most of which is freely available anyway.   I am sure if there was some commercial sensitivity (which I doubt) they could have had the MIEG involved on the basis that all such discussions are to remain confidential, at least you would then have some input from our defacto representation.

The reason I write these articles is to hopefully make others think seriously about it all and perhaps do something, not sure if I am succeeding in this regard!  But I also believe that expressing your ideas in public as opposed to a mate or neighbour provides more chance of someone developing that idea or tweaking it or coming up with something altogether better because they have turned their mind to it.  Who knows what might come from it, but this is a lot less likely with private closed door discussions.

One final thing; the tradable slaughter rights that people keep talking about was an idea developed decades ago to address capacity issues.  I have the original 70 or 80 page report and have admittedly only read the executive summary, but its purpose was to address and discourage the development of excess processing capacity, it does not address procurement issues at all, in fact the report actually promotes competition at the gate.    Deciding the correct level is apparently incredibly difficult, if too high or too low it has no effect whatsoever and as I said moreover it does nothing to solve the procurement problem we have.   Procurement and in particular the way it is done is admittedly just one problem we have, but I believe it is the first one that must be remedied if we are to turn things around, the eternal optimist (which incidentally is not me at the moment) would like to think that if we can sort out the meat industry, we actually may grow sheep numbers again as it will be profitable and accordingly in years to come we may need the current excess capacity!