SPEECH FROM CHAIR OF THE NEW ZEALAND COOPERATIVES ASSOCIATION
Welcome, everybody, to this celebration to mark the New Zealand launch of the United Nations International Year of Cooperatives. The International Year of Cooperatives is a chance to highlight and promote the global success of cooperatives, their economic importance and, for us, their contribution to the wealth of New Zealand. My name is Blue Read and I am the Chair of the New Zealand Cooperatives Association. It gives me great pleasure to acknowledge our host tonight, Minister of Commerce Hon Craig Foss, and to welcome His Excellency Mr Arie Van Der Veal, the New Zealand Ambassador of the Kingdom of The Netherlands, Members of Parliament, members of the Cooperatives Association, and distinguished guests. The President of the International Cooperative Alliance, Dame Pauline Green, will join us a little later via video. She will tell us of the importance of cooperatives to the economic wellbeing of the world, and that the world’s 300 largest cooperatives generate turnover of almost 2 Trillion NZ dollars. Our very own Fonterra is included in those statistics, one of the Global 300, and so too is the Dutch bank, Rabobank, which is represented here tonight by its Global Chairman, Mr Piet Moerland. He will talk to us shortly about their involvement with the International Year of Cooperatives. Here in New Zealand, cooperatives have been around since 1871, when eight Otago dairy farmers joined forces, investing one pound each to start their own cheese factory. Today, New Zealand has a little under 200 co-ops; some are very big businesses by both New Zealand, and by international standards. Foremost among them is the Fonterra Cooperative Group, New Zealand’s only true multinational enterprise, and the world’s largest exporter of dairy products. Foodstuffs, with its PAK’nSAVE and New World brands, and the farmer-owned meat processing companies Alliance Group and Silver Fern Farms, are also large business operations that are ranked among the world’s 300 largest cooperatives. Others can be quite small and may be found in a wide variety of sectors, such as credit unions, insurance, retailing, taxi companies, and even vehicle repair shops.
The scale and diversity of New Zealand’s cooperative sector means that they play a key role in the daily lives of a significant number of New Zealanders. Cooperatives also make a strong contribution to the achievement of the Government’s economic objectives. Compared to other countries, cooperatives and mutuals are a relatively large part of the New Zealand economy – almost 10 per cent of the country’s top 200 businesses. New Zealanders have embraced the cooperative model, one where members own and control their own businesses. The cooperative ethos suits the New Zealand psyche in many ways. The notion of self-help, cooperating, and sharing of profits is particularly strong in our rural areas, where many of our farmers and townsfolk belong to sometimes four or even five different cooperatives. Recently our Association commissioned a Horizon Research survey of more than 1,000 people. Among the detail that was reinforced is the level of importance that New Zealanders place on the business values of honesty, integrity and high ethical standards, which are core pillars of cooperative enterprise. It will come as no surprise that New Zealanders overwhelmingly want to do business with companies that display these attributes. When asked how our cooperative performed against these values, we find that we are very well considered, and we also find the reputational damage that has been caused by finance company failures has become very apparent. More than 71 per cent of New Zealanders either have less trust or totally distrust this part of the financial industry. The impact of this lack of trust has also flowed through to the level of confidence in investment in general. Fifty per cent of respondents rated themselves as “uncomfortable” about investing in publicly listed companies on the New Zealand share market. Cooperatives, on the other hand, are seen as typically putting long term gain and business stability ahead of short term profits. This has helped our co-ops come through difficult financial times relatively unscathed, compared to many investor-driven companies. BUT the word is not getting out there. Cooperatives have traditionally shied away from profile raising.
Cooperatives often donâ€™t perceive the need to communicate their successes any wider than their own membership, meaning the wider community remains uninformed â€“ perhaps also missing the opportunity to become involved. Over 70 per cent of respondents think that there is not enough awareness about the difference between co-ops and investor-owned companies, and 60 per cent would like to see universities, polytechnics, and the NZ accounting and legal professions offering more understanding of co-ops. Both consumers and producers are looking for entities they can trust, and where they can be confident of being treated well. The International Year of Cooperatives is a unique opportunity to raise awareness of the cooperative business model, and this function tonight joins New Zealand with people in many nations around the world who are also celebrating cooperative and mutual enterprise. For us, itâ€™s an opportunity to work with government and professional groups to facilitate an environment which supports the cooperative and mutual way of doing business in New Zealand. To mark this celebration, the Government has funded a statistical project which has provided figures on the contribution made by cooperatives to New Zealand GDP and to employment. From this research we see that 3 per cent of GDP comes from the cooperative sector. And the top 40 New Zealand cooperatives employ around 50,000 people between them. Our own research indicates that this top 40 had a combined turnover of more than $39 billion in the 2010/2011 financial year; an increase of over 10 per cent over the previous year. And this increase comes at a time when economies around the world have been shrinking. By way of comparison, in the United Kingdom, long considered the home of cooperative enterprise, there are 10 times the number of cooperatives, employing five times the staff of their New Zealand counterparts. But the combined turnover of the UK cooperatives is not even double that of the combined revenues generated in this country. And a statistic that I particularly like as a dairy farmer is that, in farming in the UK, there are 446 cooperatives with a turnover of 8.5 billion NZ$. Compare this with dairy co-ops in New Zealand, which alone generate revenue of over 20 billion NZ$.
While New Zealanders are pragmatic and business-focussed in the way we embrace cooperatives, less developed countries use the same self-help, cooperative philosophy to introduce sustainable food, agricultural, education and housing programmes to help raise living standards. There are some wonderful examples in developing countries where the cooperative model has proven to be enormously successful in achieving positive economic and social development. The cooperative model is one that can and does suit financial and social objectives around the world. Itâ€™s a model I am very proud to be part of a model that has stood the test of time and one that evolves with the changing world. It is a model that is deserving of the recognition that the United Nations International Year of Cooperatives confers upon it. Cooperatives and mutuals need to be taken seriously. Now, it gives me great pleasure to introduce the chairman of the worldâ€™s largest agricultural bank, Mr Piet Moerland, who will pick up on the global picture to talk about Rabobankâ€™s achievements locally and internationally.