Who benefits when jobs disappear?

Farms chairman Rob Hewett described it as a great day for the company and for New Zealand.

Shanghai Maling paid $261 million for half of Silver Fern Farms, in a deal that was approved by 82 per cent of shareholders. Everyone seemed happy, from the Government to the shareholders to the new co-owners, but rumours were already swirling that the Fairton sheep meat processing plant near Ashburton would be closed.

It has been reported that Silver Fern Farms told Shanghai Maling that it intended to close Fairton but did not tell its own shareholders nor its workers. Media were also assured that there were no plans to close any of the firm’s plants.

Rumour turned into solid fact on Wednesday when 370 staff were called to a meeting and told they would lose their jobs. The meat processing plant will close and only the pelt house will stay in business.

This decision raises many questions, which will hopefully be answered in time. Some will be inclined to ask how New Zealand benefits from an investment decision that is followed by 370 jobs disappearing. Many will also wonder why Silver Fern Farms management could not have been as open with local workers, shareholders and media as it appeared to have been with an overseas company.

A 2016 Infometrics report on Ashburton District showed that meat processing is the secondbiggest employer behind dairy farming, providing 1317 jobs or 6.9 per cent of the total. The closure of Fairton will take roughly a quarter of those jobs from the district. The bigger picture is the steady decline of sheep farming in Canterbury and the rise of dairying.

In a media statement, chief executive Dean Hamilton said that Fairton had gone from processing more than 1 million lambs prior to 2010 to fewer than 500,000 lambs last season. Some processing will continue at Pareora near Timaru, where the company has recently boosted capacity. Work may also be available in Belfast near Christchurch and in Hokitika.

It is understandable that in an election year the Fairton closure will be seen by some as symptomatic of global political trends. A populist political dimension is inevitable. The Fairton closure could be made to fit an economic nationalist narrative that has already unfolded in the United States and the United Kingdom. There is no doubt that many in Ashburton will wonder what benefit this investment brought them.