Fonterra pay out for solid milk could be an opportunity for Māori

By Heta Gardiner

Fonterra has dropped its forecast pay-out for the season to $3.85 per kilogram of solid milk. This is expected to hurt farmers all across the country but does this present an opportunity for Māori?

There are fears banks could soon force dairy farmers to sell their land in the wake of Fonterra's move to slash its forecast pay-outs. But Māori could benefit.

Dion Tuuta says, “There are always opportunities in times of stress.”

Fonterra cut its forecast pay-out for the season to $3.85 per kilo of milk solids, far below the break-even point for many farmers.

However one man's tragedy is another's opportunity.

Tuuta says, “Traditionally Māori have lower levels of debt, from their non-Māori counterparts.”

This combined with increased capital, Māori could potentially buy up farms that go belly up in the downturn.

“If you have a low cost systems, you are far better placed to whether the storm.”

Māori have a big place in the market. Māori farm over 700,000 hectares of land and own 15% of the country's sheep and beef exports.

Figures that could multiply.

Dion Tuuta says, “I have no doubt that the current environment will prosent opportunities.”

It is expected that this downturn could last up to two years.