{"id":8772,"date":"2013-10-08T00:00:00","date_gmt":"2013-10-07T11:00:00","guid":{"rendered":"https:\/\/www.farmersweekly.co.nz\/iwi-opportunities-growing\/"},"modified":"2013-10-08T00:00:00","modified_gmt":"2013-10-07T11:00:00","slug":"iwi-opportunities-growing","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/news\/iwi-opportunities-growing\/","title":{"rendered":"Iwi opportunities growing"},"content":{"rendered":"Reading Time: <\/span> 3<\/span> minutes<\/span><\/span>

He has advised a number of Maori boards on treaty claims and development. He said Maori land interests were in a third phase of their relationship with productive land, one of \u201cnew entrepreneurs\u201d.<\/p>\n

This came after the 20th century\u2019s more ambivalent relationship, often dominated by a well-meaning but constraining State.<\/p>\n

That had come after an earlier period of entrepreneurship through the 19th<\/sup> century, when Maori owned ships, grew a variety of crops, and traded as far afield as Australia.<\/p>\n

While dairying was the big story in land use today, Scrimgeour cautioned things could change.<\/p>\n

Wool was number one 50 years ago and meat was king only 30 years ago, he said.<\/p>\n

\u201cWe should not just assume that what is big today will be the same tomorrow.\u201d<\/p>\n

While Maori land tended to have a higher proportion of less-productive country, with 1.5 million hectares under operation, the sheer scale provided plenty of options for investment and advancement, he said.<\/p>\n

Given much of the land was in Bay of Plenty-Waikato, also close to large population bases, options increased and urban Maori investments might provide money to aid rural development.<\/p>\n

Investment<\/p>\n

However, as farm numbers concentrated and scale grew, the investment necessary in human capability also grew, Scrimgeour said.<\/p>\n

He pointed to the profit variation that arose between a well-run, average-sized dairy unit, netting $214,000 profit a year, against an average-run operation netting only $109,000 a year.<\/p>\n

\u201cSo a 5% improvement across all Maori operations brings a huge difference in profits and therefore returns to shareholders. But to say \u2018we want to increase profit by 5%\u2019 is not a very compelling argument. You need more.\u201d<\/p>\n

There needed to be an element of \u201cI have a dream\u201d to inspire shareholders, but the goals also needed to be multidimensional and not just about money, he said.<\/p>\n

They also needed to be owned by the shareholders in iwi groups and they needed to be given direction.<\/p>\n

\u201cThis is where hard heads and soft hearts need to come into play to keep it realistic.\u201d<\/p>\n

He outlined some ground-up strategies to help iwi achieve this.<\/p>\n

The first was to lift farm-management skills, getting the right people involved. The challenge for iwi was made greater by the recruitment of bright young Maori graduates in professional occupations.<\/p>\n

Governance level<\/p>\n

At a governance level the appointment of good directors was also a challenge, and getting selection processes and criteria right for key roles, including chief executives, was important.<\/p>\n

\u201cThey need to be clear on the context and process before such decisions are made.\u201d<\/p>\n

This included those in governance not treating farming as simply another business and required an appreciation of its biological nature, he said.<\/p>\n

Managing possible conflicts of interest was also big for iwi groups and clear paths to avoid that had to be established early.<\/p>\n

While it was often accepted that large-scale operations delivered better returns and economies of scale, Scrimgeour said it was not always the case.<\/p>\n

He pointed to Landcorp delivering a return on equity consistently below that of owner-operated farms on all but two years in the past decade.<\/p>\n

\u201cBut there are opportunities there for iwi to amalgamate and integrate blocks. If I was involved with larger corporations I would look to do some deals with Landcorp and other big land owners, where land swaps or leases can be done.\u201d<\/p>\n

Given the scale of land available, diversification was also an appealing option for some iwi, he said.<\/p>\n

\u201cGiven the impact of Psa the corporations I deal with are very happy at present they have diversification of their kiwifruit with dairy land.\u201d<\/p>\n

Scrimgeour was optimistic the practical and technological challenges facing Maori land owners could be overcome.<\/p>\n

\u201cThe risks are largely social and political that often need to be addressed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Hard heads and soft hearts are a prerequisite for Maori agribusiness boards when assessing new investments and achieving goals, Waikato University management school Professor Frank Scrimgeour told delegates at this year\u2019s Maori Agribusiness and Primary Industries Forum in Rotorua.\n","protected":false},"author":29,"featured_media":8773,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[3],"tags":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t