A Māori-owned milk company is relying on its kaitiakitanga business model to keep up payouts to its supplier farmers - as its giant rival Fonterra cuts its payout for the second time in two weeks.
Mīraka is paying 15.4 cents a kilogram more than Fonterra for their milk solids and 20 cents a kilogram for their advance rate.
“And that just softens the blow,” Mīraka chief executive Karl Gradon says.
“It softens the blow for them on the farm because there’s a lot of uncertainty, and certainty is what drives success in any business.”
Fonterra is expecting to pay out $6 to $7.50 a kilogram of milk solids this season, already down from its revised $6.25 to $7.75 per kgMS range announced over two weeks ago.
Miraka was established in 2010 by a small group of Māori trusts and incorporations and was founded upon a te ao Māori worldview that placed kaitiakitanga - the care of the land, people and the environment - at the heart of the business. Gradon says they’ve had increased interest from farmers wanting to make the switch from their main competitor.
“When people are wanting to take an intergenerational approach based on kaitiakitanga and they share similar values with us and want to see the on-farm improvement and cost structure improve, which incentivises them to do exactly what they’re going to do anyway. Yeah, we are seeing good strong interest.”
With its ‘Te Ara Mīraka’ initiative established in 2017, farmers are financially incentivised to strive for excellence in animal welfare and on-farm sustainability.
“How do we improve the water quality on the farms? How do we improve biodiversity on our farms? How do we minimise nitrate usage on our farms? How do we ensure the workers on our farms are trained and invested to grow with the business? It’s a kaitiaki-driven philosophy in how we encourage our farmers to reinvest back into their whenua and their herd.”
This business model has allowed Mīraka to reinvest $21.6 million back into its farmers so they can continue kaitiakitanga in their practice.