Forget Ovita Say Farmers
Last year, the McKinsey consultants suggested a commercial sheep genetic improvement company, Ovita, could speed productivity gains in the sheep industry. But they stressed that delays in establishment could be costly. Now almost a year after the release of the McKinsey report farmers are questioning whether the Meat and Wool Boards should be supplying the venture capital for such a company.
"Farmers attending Meat & Fibre Producers' North Island Forums last week expressed concern that the viability of Ovita had been compromised" said Meat & Fibre Producers Chairman Murray Taggart. "The Meat and Wool Boards' inability to establish the biotech business within the McKinsey timeline has increased the risk that the competitive advantage Ovita may have enjoyed has now been substantially eroded."
Dissatisfaction with Ovita has been fuelled by the realisation that the corporate sector is investing heavily in biotechnology. This includes large offshore corporates such as Monsanto and closer to home, to research and development company Genesis. Even primary industry is in on the act with Rubicon (forestry) and PPCS (meat) as examples.
"I would have to question why the producer boards are investing grower funds into ventures that are undertaken on a commercial basis by the private sector" Mr Taggart said.
"Farmers at last week's meetings made it clear that where venture capital investment in biotechnology is sought, they will make that investment decision as individuals. They do not want Producer Boards making this investment decision for them using levies and/or reserves."
"Today's farmers are skilled at making investment decisions involving substantial sums of money, said Mr Taggart. "They do not welcome producer boards making commercial investment decisions on their behalf and will make the biotechnology investment decision themselves."
"In the final analysis, farmers will end up paying a premium for biotech products, whether the research is funded by the corporate sector or by the producer boards," Mr Taggart said. "Farmers are asking the question: why pay twice?"