One area where I agree with Fran O’Sullivan is the dairy industry. Today she covers the Crafars:
CraFarms’ bankers should do the decent thing and put the so-called dairy farming “giant” into receivership before its practices further decrease the value of its assets and bring New Zealand’s prime agriculture export industry into international disrepute.
The Government is quickly losing patience with the aloof stance the bankers are publicly taking while the Crafar family business, whose rocket-like growth they fuelled with $200 million of loans, proves itself to be a management disaster.
In case the Government hadn’t noticed, the banks are foreign-owned, the reputation of our agriculture export industry is of little or no concern to them. Who it should be of great concern to, however, is the Government. If they were a decent government, they wouldn’t be sitting on their hands and hoping the banks will act, they would act themselves.
The banks can’t actually afford to put the heavily indebted CraFarms into receivership. This is the biggest dairy farming company in New Zealand. In August, not a single dairy farm was sold. Receivership sales of CraFarms’ farms would see them go at deeply discounted prices. That would force the banks to revalue downwards the book value of all their dairy loans. Obviously, the banks are keen to avoid taking a huge paper loss.
All Agriculture Minister David Carter has managed to do is ask for a report from his officials. If he were a good minister, he would be joining the Greens in condemning and publicly ostracising the Crafars, to make absolutely clear that their behaviour is not typical of farming practice in New Zealand and is completely unacceptable. The Government has the power to appoint a statutory manager of Crafarms to oversee wrapping it up.
Come on Carter, do your job.