Briefing to incoming goverment: Non-Trading producer Boards
Executive Summary
1. There is likely to be an ongoing role for collective organisations in the meat, wool, pork and game sectors to provide services which would be provided by farmers acting individually. It is important that any such organisations operate efficiently and to the net benefit of their funders and owners.
2. The non-trading boards, however, currently operate in an environment that allows the Boards to:
· levy producers without producers being able to determine directly whether they should be levied, the size of that levy, and what the levy is to be spent on;
· operate inefficiently because of little effective accountability to levy payers; and
· spend levy income and reserves on commercial activities, prejudicing the quality, quantity and scope of services that would otherwise have been provided through voluntary means.
3. Further, the Boards’ current special statutory form makes it difficult for them to respond quickly and effectively to the opportunities and challenges facing their industries. It also makes the Government a major player on matters of corporate governance.
4. In developing options to promote the Boards’ ability to work more effectively in the interests of their industries, it is important to consider a number of key objectives. In particular, it is important to consider ways by which:
· the Boards can be made more accountable to their levy payers;
· the Boards can operate within generic governance legislation;
· the activities of the Boards can be constrained to areas that will not replace or ‘crowd out’ commercial activity;
· decisions as to how the Boards’ reserves are used can be made by the beneficial owners of those reserves; and
· the quality of Board activities can be improved so as to generate real returns for their industries.
5. Whichever option is chosen, the paramount consideration must be the extent to which that option uses scarce resources to the greatest possible value in a growing and dynamic economy.
Introduction
6. This briefing addresses issues relating to the Wool Board, Meat Board, Game Industry Board and Pork Industry Board (the non-trading producer boards).
7. The brief is in two sections. The first section provides an overview of the wool, meat, game and pork industries, and their respective Boards. Key industry trends are identified, the predominant being the long term fall in commodity prices. The Boards’ current activities, size and powers are also outlined, as are some of the key questions posed when considering the current legitimacy of their role and functions.
8. The second section provides an overview of the work the Producer Board Project Team and the non-trading boards have done in seeking to develop a regime that will better serve the interests of producers and their industries. Problems with the current institutions, their structures and powers are identified, and a number of options are discussed.
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Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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