Subsidy supports essential food firms

AUCKLAND: Primary food processors deemed essential under Government’s lockdown restrictions have received wage subsidies totalling about

$90 million.

The Ministry of Social Development’s online search tool, developed to promote transparency of payments under the scheme, shows that the two major meat companies account for a combined $77.7 million.

Silver Fern Farms and

Alliance Group have been paid subsidies of $43.3 million and $34.4 million respectively to supplement wages for a combined 11,000 workers.

Blue Sky Meats was paid

$2.4 million for its 340 employees and Mataura Valley Milk was paid $616,000 for its 88 staff, while the Government contributed $9.2 million for the 1403 staff working for farmerowned cooperative Farmlands.

To qualify for the scheme, companies have to show a 30% drop in business up to June as a result of the pandemic.

The subsidy has a flat rate of $585.80 per week for full time employees working 20 hours or more per week and $350 per week for employees working fewer than 20 hours per week.

It is paid as a lump sum to cover employees for 12 weeks.

Silver Fern Farms head of sustainability Justin Courtney said the company had applied for the subsidy during ‘‘considerable uncertainty’’ caused by global market disruption; containers were held up in China, airfreight to Europe was cancelled, and there were disruptions in the Middle East and delays in containers returning to New Zealand for future shipments.

He said the company’s focus was supporting employees through a time when production levels had decreased by up to

50% at some sites and the impact on revenues had been projected at 30%. The subsidy was being paid to the company’s 6161 employees.

He said salaries were being retained at ‘‘not less than 95%’’ of a normal production day, despite lower throughputs. The company had also implemented a bonus for production staff.

Alliance Group chief executive David Surveyor said the cooperative expected ‘‘at least’’ a 30% decline in revenues over the coming months.

Physical distancing rules had reduced the processing capacity of the company’s plants by up to 50%, making it more costly to operate the network at a time ‘‘when we would normally be at peak livestock volumes’’, Mr Surveyor said.

He said the application was supported by the Meat Workers Union.

‘‘Our analysis indicates we have saved almost 1000 jobs to date from early season ending and secured 3800 others by continuing to safely run our plants, albeit in a far less efficient mode.’’

Both meat processors said the subsidy would only be used in the way intended by the Government; funds would be reimbursed if they no longer met the criteria. — BusinessDesk