Selling New Zealand’s brand and profits

New Zealand is headed towards having our farming families becoming peasants in their own land by allowing further and unnecessary foreign investment into processing of New Zealand dairy production.

The ticking off of two new foreign dairy processors into New Zealand production by the Overseas Investment Office is a huge opportunity cost to New Zealand’s biggest company and farmer owned co-operative Fonterra.

This week, Yashili International have been ticked to build a baby formula processing plant south of Auckland, and Inner Mongolia Yili Industrial Group have been ticked through similarly for a plant near Glenavy.

Both companies have been implicated in food safety scares, such as melamine or mercury contamination, and are relying on New Zealand’s reputation as a producer of safe and clean food.

The two companies are to spend about $200 million dollars each; money which could be raised by New Zealand farmers through a retention policy, such as Fonterra is already operating.

The purported investments show that New Zealand’s brand and product is sought after, but giving even more of the value chain to overseas interests reduces opportunities to ensure a pricing structure for New Zealand farming families and investors to build a sustainable future.

Current supply and demand price signals on the back of New Zealand’s drought show that we can achieve higher prices, allowing more sustainable farming practices, while compensating for any possible decreased total volumes. Handing over any potential value gains to foreign investors will make sustainable farming practices all the more difficult for farming families.

13 thoughts on “Selling New Zealand’s brand and profits

  1. Current supply and demand price signals on the back of New Zealand’s drought show that we can achieve higher prices, allowing more sustainable farming practices, while compensating for any possible decreased total volumes.

    What?

    Prices go up due to temporary *scarcity* and this somehow means we can have “more sustainable farming practices” as a result?

    Don’t you need to demonstrate higher *margins* over time?

  2. if we go over OIO records, surely there were be many more shocking findings.
    Asset sals is big and obvious, a bunch of rats chewing away parts of the house bit by bit less noticeably is euqally dangerous and damaging to our country, the house will fall and collapse one day and most people won’t even know how and why…

  3. The Greens continually attack dairy, then complain Kiwis aren’t investing in it.

    Why would Kiwis want to invest in NZ when we have politicians on the left who think profits from investments are evil.

    Just yesterday the Greens were complaining that those who invested in NZs future in ultra fast broadband were making a small profit on their investment, and it should be taken away.

    They are anti any trade agreements that help our exporters prosper.

    They are anti oil industry, anti mining industry, anti dairy industry, anti transport, anti roading, anti banking industry etc etc.

    They want higher tax, more business regulation, more business costs, more wage costs for less hours worked, carbon taxes, capital gains on businesses etc etc.

    It seems that if a Kiwi invests in NZ, the Greens want to snub out any chance of a small return.

    Rather than the never ending anti-business attacks from the Greens, they’d be better
    – encouraging Kiwis to invest in our listed companies,
    – encouraging buying shares in the foreign banks who operate here.
    – encouraging making profits

    The Greens want more jobs, but fail to realise that it’s when companies are making good profits, that they take on more workers.

    If profits are lower as they will be with Green policies, the first thing to be cut will be new and existing jobs.

  4. Arana – If we make less or more or the same the price IS going to rise… others may compete at a higher price but our PRODUCTION price is lower, particularly if we use sustainable farming and we, unlike just about anyplace else on the planet, are not absurdly overpopulated. We can produce X amount of milk sustainably. That X may change slightly but it is really not as flexible as people assume.

    A cow is a cow is a cow. Grass is Grass is Grass. Sun, Water, Earth…. not changing. So much milk per cow, so much grass and water per cow, so much land under cultivation and our limits are pretty well established.

    So if the value goes up, we should still NOT try to increase our production… let the folks using the unsustainable methods do that, and watch that production spike upwards – and then fall as they trash their land in the attempt.

    I see no reason to expect that the *scarcity* is going to be a temporary thing. Demand is rising and climate is worsening.

  5. Ridiculous, BJ.

    New Zealand trying to create artificial scarcity isn’t going to work. If we tried, I’d go buy a farm in Argentina, as would many others, I’m sure. That part of the world would grow richer, we’d grow poorer.

  6. I didn’t say anything about US trying to create ARTIFICIAL scarcity.

    Did I? Check your assumptions at the door mate.

  7. You’d better be in quick Arana. And dairy farming may not be the most profitable thing to do with ‘your’ land “Today Soros is making a killing buying and selling farmland in South America after converting them to biofuel production… this has caused the land prices to increase dramatically”
    http://www.corpwatch.org/article.php?id=15807

    And what is this “artificial scarcity” you speak of?

  8. Photon, the thread is about the OIO “giving even more of the value chain to overseas interests”.

    Were you meaning to post on the general debate thread…on Kiwiblog?

  9. So if the value goes up, we should still NOT try to increase our production… let the folks using the unsustainable methods do that, and watch that production spike upwards – and then fall as they trash their land in the attempt

    False dilemma.

    As I’ve pointed out, many other countries can produce JUST like we can. If we raise our production costs, or don’t reduce them, they will eat our market. The result of that will be less public spending here, although a lot more in Argentina.

  10. converting them to biofuel production

    Oh, the irony.

    Now, if that really was the case, then expect a lot more of that here. And you to pay a lot more for your food.

  11. Indeed, the future price of food is a worry. Although it could also be a positive for a country like ours (relatively small population, food producing), unless we allow the OIO to continue as it is…

  12. If profits are lower as they will be with Green policies, the first thing to be cut will be new and existing jobs.

    For a party that bangs on about sustainability so much, it’s curious their economic policies are the complete opposite i.e. spend more, but reduce earnings.

  13. Arana says “For a party that bangs on about sustainability so much, it’s curious their economic policies are the complete opposite i.e. spend more, but reduce earnings.”

    It’s astonishing that anybody, anywhere, thinks that a company who has to pay more tax, more in compliance costs, more for wages, for less work done – will be in a better position to take on more staff.

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