It's not so much that their worries about another country taking a major stake in our No 1 industry are unjustified, because they are not. It's more that Taranaki's dairy industry owes a great debt to the investment of the Chinese; one Chinese man, in particular.
Chew Chong was a diminutive Chinese businessman who became a pioneer in Taranaki and New Zealand dairy farming. He was a key figure in helping to develop the region's dairy industry, especially in the manufacture and refrigeration of butter.
At the time he was seen by many struggling farmers as a saviour and is even credited with creating a New Zealand icon – the pound of butter.
Things have most definitely changed since then, with the industry he and others founded growing into a powerful global conglomerate. But if New Zealand's vital agricultural industry is to meet the many challenges posed by that huge marketplace, it may need to take the kind of leap forward that this little Chinese man represented in the mid-1800s.
The Chinese represent one threat but there will no doubt be others as the focus narrows on the provision of such important primary products as milk, powder and other dairy products. And their use in lucrative value-added commodities.
However, Fonterra is struggling to gear itself up financially to take on aggressive competitors because of the structure of the co-operative and the money needed to stay a big player and one step ahead of other hungry chess pieces.
Farmers have, for many years, fought the efforts of Fonterra's head office to reshape the company with a capitalisation programme that would give it more money to expand and combat aggressive overseas raids.
They have raised concerns about losing too much control over milk supply and price. But that has left Fonterra having to find the money it needs from shares distributed among the farmers themselves or possibly from `units' sold to the public with no ownership stake.
Fonterra's contortions and its scrambling for a workable financial model emphasise that the company needs exactly what many farmers fear: Investment, with some of it possibly to come from overseas.
That may mean its shareholders – the farmers – giving up a little of the ownership and control they have at the moment. But it will give Fonterra more capital to grow and solidify its position in a volatile market.
- © Fairfax NZ News
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