Three news items stood out this week: KPMG’s global leader
for agribusiness and food predicts New Zealand’s ag-exports could grow to $100
billion in 20 years, if we move away
from commodities into riskier value-added products; as if to underscore the
inability of farmers to control volatile commodity markets, global dairy prices
dropped another 8%; and a research project was launched to study the
contribution cooperatives make to our economy.
Like many New Zealand ag-exporters, Fonterra is owned by
farmers through a cooperative ownership model. And like many of these
exporters, it is constantly accused of failing to innovate and move along the
value chain, away from its reliance on bulk commodities into more brands and
consumer products. It’s easy to level this accusation when farm-gate prices have
crashed in line with the global commodity price, but farmers must get sick of
being price-takers afloat on such a volatile sea.
The study into cooperatives, particularly their ability to
innovate and add value to the raw product, could be telling. To reach the $100
billion target, KPMG estimates we need to increase the compound annual growth
rate of ag-exports from 4.5% to 5.4%; Sounds easier than it is. Can we make
this leap under the dominance of the cooperative model?
To understand how co-operatives contribute to the economy, a
team from The University of Auckland Business School and Erasmus
University’s Rotterdam School of Management is undertaking a series of case
studies and a major survey of co-operative businesses.
Researchers Dr Frank Siedlok and Dr Lisa Callagher say it is
time to find out how the 149 Kiwi companies registered as co-operatives tick,
what they are doing to improve their competitiveness here and abroad – and what
lessons can be learnt to help all co-ops to do better.
“Several high profile co-operatives, such as Zespri and
Foodstuffs, show that through strategies focused on added-value products or
services, innovation and knowledge-sharing, they can successfully compete
against large private sector organisations and multinationals. Yet, there are
many misconceptions about just how innovative and entrepreneurial they are. We
want to better understand the mechanisms that can make co-ops more competitive”
says Dr Siedlok.
