Saturday, December 9, 2023

Proposed restructure on the cards at Feds HQ

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For some time now Federated Farmers has been facing the same inflationary pressures as the rest of New Zealand. 
Feds CEO Terry Copeland says it’s ‘little wonder that our primary food and fibre products are so highly regarded in the intensely competitive international marketplace’.
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By Terry Copeland, Federated Farmers CEO

Earlier this month Federated Farmers announced a proposed restructure of the organisation and I appreciate that there has been some interest in this from our members. 

It’s understandable that people are looking for more detail to help them understand the decision and what the flow-on effects may be for the important work we do on farmers’ behalf. 

While I am limited in what I can share publicly, given this has potential employment implications for our staff, I strongly feel that as a membership organisation that we have an obligation to be as transparent as we can be about why these changes are being proposed and how we came to be in this position. 

For some time now Federated Farmers has been facing the same inflationary pressures as the rest of New Zealand. 

Our situation is not unique and we are not alone in having to make these difficult decisions. 

We have seen large cost increase when it comes to things like fuel, travel, insurance and salary costs.

Since 2020 our staffing costs alone have had to increase by 32% as we’ve had to pay more to attract and retain staff. 

We have also had to compete with other organisations, including government departments and regional councils, who have been offering large salaries for staff to support them as they struggled, just as we have, with the pace and scale of the government’s reform processes. 

We have also seen a small reduction in year-on-year revenue. Although our membership numbers have been relatively stable for the last few years, and we’ve actually seen an increase in the percentage of farmers that we represent, there has been some gradual attrition over time due to farm amalgamations, conversions to forestry, and increasing numbers of lifestyle blocks.

The situation has reached a point where it is no longer financially sustainable for our organisation and change is required. 

We need to act now to protect the viability of Federated Farmers so we can continue the important policy and advocacy work we do on behalf of farmers and rural communities now and into the future. 

Simply increasing our membership fee for next year to cover the shortfall just wasn’t a realistic option for us. 

We know that farming families are facing the same rising costs, along with falling incomes, that we are – and we didn’t want to add to that. 

Farmers are having to make hard decisions and cut their budgets, so we need to do the same. 

If we don’t make changes the organisation is looking at a forecast deficit of around $1.2 million next year, with that set to increase over time. 

That’s why we are proposing a reduction in headcount of up to 13.8 FTE from right across our organisation, not just one area. 

This could see us fall from 63 employees to around 49.

I also want to be very clear that we aren’t just looking to reduce headcount and are trying to find other cost savings too, but the reality is that we already run an incredibly lean organisation compared to others and staffing related costs make up over 75% of our total budget. 

This means that there is very little that can be trimmed from other budget lines. 

It’s also important to acknowledge that while a need to cut costs has been the major driver for these proposed changes, it’s far from the only driver. 

There is also a real need to refocus our organisation so we can continue to meet the needs of our members in a modern advocacy environment to ensure we are getting the best policy outcomes we can for farmers.

This means we need to be looking at how we can make the shift from being the largest policy team outside of government to being the best policy team. 

We need to be relentlessly outcome-focused for farmers, avoid duplication with other organisations such as DairyNZ or Beef + Lamb NZ, and focus our efforts on addressing concerns at the central government policy setting level, rather than having to fight expensive court cases at the regional implementation stage.

There is still an absolute commitment to ensuring regional policy coverage across all our provinces, and ensuring that work doesn’t simply fall on the shoulders of farmer volunteers who already have more than enough on their plates.  

But we need to be working much smarter than we have been in the past and clearly defining the role of Federated Farmers.

MORE: Bryan Gibson chatted with Terry Copeland during this week’s episode of In Focus. Listen below (from the 19.20 minute mark)

Federated Farmers, New Zealand’s leading independent rural advocacy organisation, has established a news and insights partnership with AgriHQ, the country’s leading rural publisher, to give the farmers of New Zealand a more informed, united and stronger voice. Feds news and commentary appears each week in its own section of the Farmers Weekly print edition and online.

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