Tuesday, August 9, 2011

The Price of Milk & Social Responsibility

There's no doubt that farmers are the backbone of the New Zealand economy; that they work hard and that they deserve the rewards of that work. However there are some questions that I have about the market assumptions that seem to operate these days.
  • Most of the 'competition' in the market for milk products has been managed by the farmers' co-operative Fonterra.
  • Many farms are owned not by the local farmer but by investors or corporations and (mis)managed accordingly (i.e. profit driven without a sense of stewardship).
  • Foodstuffs and Progressives are the great chains that set supermarket prices, but they do so in an environment where Fonterra is steadily trying to get higher prices overseas without regard or consideration for the domestic market.
Yet the dairy industry is built upon the land in which all New Zealanders should have an interest and I want to argue that all parties, Farmers, Fonterra and the Supermarkets should acknowledge that by a social responsibility agreement that reduces the price of dairy product for the home market.

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