22 August 2011

With Fonterra downsizing its organic operation, Federated Farmers is to ask the cooperative for greater transparency while working for affected members and farmers.

“Today is not a red letter day as my meeting isn’t until tonight in Palmerston North and I don’t know if I’m in or out,” says Gray Beagley, Federated Farmers Dairy organic spokesperson.

“It’s disappointing and leaves us in a lurch. We need to ask how hard Fonterra has worked to develop new markets locally and internationally.

“Only last year, Fonterra said publicly that the only way for organics was up even in the current economic climate. It even rescued suppliers from the defunct Taranaki based New Zealand Organic Dairy Farmers Co-operative, so it’s all a bolt from the blue.

“Farmers don’t take kindly to spin and organic dairy farmers like me are spinning as we face one of three choices.

“As organic dairy farmers, we believe in a philosophy and a way of farming but to continue doing so without a milk premium affects our profitability and viability. We could flag organics altogether, but that will be heart breaking and waste the time, money and effort we’ve put into our farm.

“The final option is to leave Fonterra at the end of our contract in order to supply someone more committed, or to join with other like-minded farmers.

“Before Federated Farmers can issue anything, we wish to get a feel from affected members and to talk with the other processors. Federated Farmers’ Andrea Beagley is keen to hear from non-Federated Farmers members affected by this decision, so please call her on 0275 511 673 or via 0800 327 646 (0800 FARMING).

“Clearly, there’s need for a ‘what next’ session for organic dairy farmers affected by this.

“What I can say is that Federated Farmers will work in the interests of our organic members and that will include talking with Fonterra itself,” Mr Beagley finished by saying.

Federated Farmers is also concerned at the way the announcement was handled to affected suppliers; some not being told before the media release was issued.

“We’ll be calling on Fonterra to please explain this announcement. It didn’t come up once at a summit meeting we held with them only last week,” says Willy Leferink, Federated Farmers Dairy chairperson.

“Fonterra’s organic consolidation is a sobering international assessment of global organic demand. Consumers are seemingly unwilling to pay an organic premium.

“It’s a warning to those pursuing policies that add costs onto production without any payback. It also warns those who believe a niche should become an industry-wide template. Niches are niches for good reason.

“As Gray correctly says, it is a bolt from the blue. It doesn’t leave a good taste in the mouth and has wider implications for supplier relationships and we need Fonterra to understand that,” Mr Leferink concluded.

ENDS

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