Town pivotal in dairy history
Roots of a giant revealed
Putaruru can lay claim to being one of the most influential places in the country for leadership in the dairy industry, a new book reveals.
Till the Cows Came Home by Clive Lind is the story of how New Zealand and its dairy industry had to turn itself around once Britain announced it was joining the European Economic Community (now the EU) in 1961, finally succeeding in 1973, a move that would exclude exports from New Zealand.
The book tells the story of how co-operative dairy company mergers started to accelerate as technology improvements and a competitive payment system derived by the sole statutory exporter, the New Zealand Dairy Board, had a huge effect.
At the same time, the board had to find new markets around the world because the decision to join the EEC meant exports to Britain, which had been taking 95 percent of all dairy exports, would start to wither.
Many of those markets were heavily protected by subsidies and punitive tariffs and New Zealand politicians and business leaders had to battle hard to make headway, a situation which remained until the completion of the Uruguay GATT round in 1994 and the establishment of the World Trade Organisation.
‘‘It’s a quirk of geography that two of the most influential leaders in the dairy industry should come from one relatively small area,’’ author Clive Lind said.
‘‘First, there was Jim (later Sir James) Graham who farmed in Putaruru and was perhaps the first dairy industry leader who could command massive respect on world stages. He became chairman of the Dairy Board in 1982 after being a director of the New Zealand Co-operative Dairy Company representing the Putaruru, Tokoroa and Rotorua ward.
‘‘He had to placate Americans angry over New Zealand’s anti- nuclear stance, console furious French who had been caught out badly in the Rainbow Warrior affair and deal with the Soviet Union when we needed them desperately to buy our butter and they needed us to provide expertise to help them lift their exports. It was a strange situation
‘‘Then there was Henry van der Heyden (later also knighted) who played a massive role later, when the companies had come together with the Dairy Board after years of negotiation, disagreement and posturing and formed what became Fonterra.
‘‘He too came from the Cooperative Dairy Company which had become Dairy Group in the meantime, and was initially nominated by Jim Graham for that post.’’
Sir Henry played a crucial role in helping to form Fonterra at the end and he became the company’s second chairman, Lind said.
‘‘Interestingly, at the outset, both men used the same tactic when it came to getting on to the dairy company board. They took time out and visited every farmer in the ward that they could. It earned them votes but it also meant they knew who they were representing in co-operative companies where such things matter.’’
Lind described the survival of the industry as a miracle.
‘‘First there was a Labour Government which brought about huge change, and single-sellers weren’t part of its philosophies. Then the return of a National Government in 1990 brought many who believed the same thing.’’
Till the Cows Came Home tells how gradually there came a realisation following numerous consultants’ reports that there should be one co-operative company. Not everyone agreed, and others could make a case for two major companies. There already were two such companies
as merger followed merger. Apart from some small companies, New Zealand Dairy Group and Kiwi Cooperative Dairies were the major players. Arguably, both were big enough to go on their own. But what of the Dairy Board, and where would it fit in? In the end, dairy farmers themselves through some crucial elections sorted the issues. Some company directors were ahead of their farmer suppliers who still saw the value of one selling organisation working on their behalf. If there were two such organisations, they would inevitably compete with themselves and prices would drop.
One large company, however, was no fait accompli. On the industry’s first attempt to convince the Commerce Commission, it was turned down on numer- ous grounds by an authority bound to look at the effects of such a merger on New Zealand, not international trading.
And so a plan was hatched to avoid that, by making a comprehensive case to a newly- elected Labour Government that new legislation to restructure the dairy industry was the only way both the industry and the best interests of New Zealand as a whole could be satisfied and the country and industry could progress.
It was a plan that depended on 75 per cent of eligible dairy farmers supporting it under cooperative companies’ legislation, an overwhelming support level that could not be guaranteed until the end.
Massive change does not come about without strongwilled individuals.
‘‘What made Till the Cows Came Home so interesting to write were the large personalities involved,’’ Lind said. ‘‘The chairmen and directors of the Dairy Board came from different companies and they were extremely proud of what had been achieved.
‘‘They were fiercely competitive among themselves at the manufacturing end. Internationally, however, they could see how working together made sense.
‘‘But when it came down to a new structure for the industry, they really wanted something different and that inevitably was going to mean the end of the Dairy Board itself.
‘‘ It was fascinating to record how distrust among themselves turned to consensus and then to agreement.’’ Till the Cows Came Home is available at all good bookstores, RD1 and Farmlands.
GAME CHANGER: Sir Henry van der Heyden of Putaruru played a major role in the creation of Fonterra. INSET: Author Clive Lind