Forum Archive Index - January 2001

["Mark Hubbard" <mhubbard@es.co.nz>]

From: Narena Olliver <narena@nzbirds.com>


I've just got to make a few comments on some of these points - please note
Narena, I'm only disagreeing with your 'meaning', so none of the below is
meant as a personal dig :)


> For those interested in ethics and investment, don't forget about the
> effect of  Kerry Hoggard and insider trading.

No comments on this matter, as I did not have time to follow the issues
close enough at the time. However, did not Hoggard 'front up' of his own
volition (saying something about his personality), and that he essentially
made a 'honest' mistake. I may be wrong, however, and this was not really
the point I wish to address.


>Also, the firm deals in
> "dirty" farm chemicals - as fast as US companies have been off loading
> them, NUF has been picking them up.

That use of the word 'dirty' is very emotive, and could, IMHO, lead the
investor, and quite apart from this, humanity', seriously astray if such
'politically correct, greeny city' views were taken for truth. Thus, perhaps
a balancing view to this often taken IMO mistaken view regarding NUF.

In general,  the use of technology (chemicals, etc) has allowed humanity to
advance to the stage it is at now. Although you shall be able to cite many
different examples of the ill use or technology/chemicals, doing so ignores
the overwhelmingly positive effect of technology. The ever more intensive
type of farming that the developed world has had to undertake in order to
feed an increasing population has only been made possible by the use of
technology/chemicals, that is, mankinds' ingenuity.

Specifically, I'm an accountant in a rural area with predominantly a farmer
client base. In line with my above statements, it is my observation, based
on experience and working with the farming sector that the move to bigger
and bigger farm units (especially dairy), searching for bigger economies of
scale in order to deliver acceptable returns (remember, farmers and price
takers, not makers) has meant that the amount expended on fertilisers and
chemicals would be, I am sure, increasing dramatically, not diminishing
(this is certainly so across my clientbase). Indeed, as the farm operations
get more and more intensive, this must continue. While organics certainly
has a place, I suspect for a very long time yet it will only ever be for a
'niche' market, and quite simply, the developed world could not afford a
scaled reversion to organics, either monetarily, or, indeed, if it wants to
have the ability to feed its populations, (as a reversion to organics would
necessitate large losses in production and output). Although smaller
operations, such as market gardens, may be able to make the shift to
organics, I can offhand think of no organic dairy or livestock operations.
The one sheep farmer I had who was looking at converting, ended up
dismissing it as the cost (mainly in terms of lost production, ) was just
too prohibitive. As for a large scale dairy unit operating successfully, or
even operating, without the use of fertilisers - it won't work.With the
rapid conversion now of vast tracts of South Island farmland to dairy, the
fertliser use will be increasing (and by a large factor). It is my
observation that the major talk of organics, and movement away from 'dirty'
chemicals and fertiliser, comes mainly from city greens (who don't know
s####, just look at Jeanette Fitzsimmons) and lifestylers. If you talk to
farmers, you get a very different, and more realistic, point of view - and
they are NUF's market.


>This is the guts of their business
> and any forays into genetics has been opportunistic.

There is a contradiction in this statement. That part of the green market /
consciousness (often ill informed, especially, unfortunately, at a political
level - am I beginning to show a political bias yet :)) that spurns 'dirty
chemicals' also will have 'no truck' with genetics. Thus, following your
argument, NUF forays into genetics would be negative, not positive, as you
phraseology would seem to imply. Although you are right, genetic engineering
alongside nanotechnology is the path to humanites next big step up, and is a
very positive thing (and lucrative for those companies who secure the
cashflows from the break throughs that will be made). Again, given the
current luddite political leadership of NZ, this country may not be able to
reap the benefits from this that it would otherwise be able to - for that
reason, I can understand NUF's move to Australia.

Finally, which US companies are offloading what chemicals that NUF is
picking up? I don't understand that statement.

Please remember that all of the above in IMHO only, and I hope I have not
inadvertently over stepped 'what is proper' :) But I just get a little tired
of the untruths implicit in the 'dirty chemical' argument - especially as
far as the 'real' market is concerned, which is not in Wellington. We can
all be thankful for the bulk of the chemicals developed to date, as we owe
our standard of living to them.



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