4.0 BENEFITS OF THE SHAREMILKING SYSTEM
As identified in the background to this paper, historically the benefits from the sharemilking system accrue to three specific groups. Firstly, the sharemilkers themselves are able to earn an income which is high enough to enable them to purchase a farm. The farm owner benefits through being able to discontinue milking and slowly reduce inputs into the farm, while retaining a reasonable income and return on their investment. The dairy industry has also benefited through sharemilkers bringing new ideas and fresh motivation to their positions, resulting in increased production. In addition, sharemilkers have also provided a relatively stable labour force with little industrial unrest.
It would be true to say that little has changed today. Groups of 50/50 sharemilkers, and farm owners with 50/50 sharemilkers, identified the following benefits of the sharemilking system. From the sharemilkers' point of view the most important benefits were:
- the ability to build capital towards financial goals;
- the lifestyle enjoyed while farming; and
- the farming and business skills gained, through experience and other necessary education, while climbing the sharemilking ladder.
With the traditional goal of farm ownership, sharemilkers are driven primarily by the ability to make a good income in order to purchase farms.
From the farm owners' point of view, the historical reasons noted previously were echoed as the driving reasons for entering into a 50/50 sharemilking agreement. Once again those were:
- they can discontinue milking cows without relinquishing total involvement in the farm; and
- they can maintain an income and modest return on their investment.
In addition to these often quoted benefits, a number of other benefits seen were:
- a sharemilker is a relatively cheap labour force on an hourly basis;
- a sharemilker will produce more than a waged worker and therefore increase, or at least maintain, the value of the property; and
- utilising a 50/50 sharemilker releases a farm owners' capital, through the sale of cows, which may be used to purchase more land.
From the wider industry's view point the same benefits are also still evident:
- allows younger people to come into the industry;
- young people provide new ideas resulting in increases in production; and
- little industrial unrest.
The merit of each of these viewpoints will vary depending on the individual's position in the industry. However, the major reason which sees the sharemilking industry continue to exist is that the sharemilkers and farm owners find mutual benefits in being involved in the system. Those benefits allow the farm owner to finish milking cows, and the sharemilker to build capital towards their goal, whether or not it is farm ownership.
Contact for Enquiries
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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