Resource Security: Tasmanian Milk
A disturbing aspect of our corporate greed is the mantra that the primary objective of business is to maximise shareholder wealth. Why? Because there’s a lot more at stake in business than a bunch of pissy little shareholders grubbing for another buck. Business should also be about balancing the needs of other stakeholders in the community, the supply chain and the environment. Let’s call it the holisitic business approach.
Enter the current dispute in the Tasmanian Milk Industry. It takes more than 40 cents per litre to produce milk at the break even point. Over the last few years the farmers have been squeezed and squeezed again by the reducing margins for their milk in contracts to the companies… mainly its a big guy vs little guy muscle thing… then the unthinkable happened. The companies free-fell their price to about 22 cents per litre with the reasoning that there was over-supply.
Worse. Prior to the free-falling price strategy they openly encouraged their milk suppliers to build new infrastructure… because their industry was secure.
So what’s the company’s strategy? Its pretty obvious they’re out to obtain resource security – send the farmers broke (one guy I saw on television lost over $200,000 this year on milk prices, not atypical, an unsustainable loss for small business) and then buy up the farms when the war is over and have farmers work for them on company property. Yep simple strategy, brutal consequences… and happy little grubby shareholders. Long-term cheap resources secured.
The simple fact is that nobody in our society should be asked to supply any company our labour or other inputs for less than the cost of production PLUS a decent margin of profit. Dairy is an expensive industry – vet fees, pregnancy management, calving, land management, silage, water fees, wages, maintenance, equipment such as tractors and multimillion dollar milking and storage facilities.
But don’t for a minute think this is just about what that company spins into the newspapers… that’s just called framing the question in their own way. Some food for thought… so to speak. Give the dairy farmers a fair go.
