An incentive scheme to get suppliers to the Taupo-based Miraka dairy company to produce better quality milk and adopt best-practice systems is producing stunning results.
The company’s programme Te Ara Miraka financially rewards suppliers for meeting five criteria: people, the environment, animal welfare, milk quality and prosperity. Within these are 31 criteria -- 13 of them mandatory for farmers to meet. These in turn are extrapolated out into a points system – all told 100.
A supplier who passes the mandatory ones gets some incentive, but achieving 100 points will bring an extra 20 cents/kgMS at the end of the season pro-rata depending on the points won.
This year a Mangakino farm in the Wairarapa Moana Trust scored 100 and got the maximum bonus. Miraka chief executive Richard Wyeth says the staff on the winning farm worked extra hard and got an outstanding result.
In this second year for Te Ara Miraka the response from Miraka’s 110 suppliers has been greater engagement and adapting to change, he says. Most of the farmers will get some sort of bonus; only a very few will get nothing.
Te Ara Miraka is more than just producing lots of good milk, Wyeth says. It looks after staff, regularly reviews their performance and pays above the minimum wage.
“We see it as an investment in the long term. All the things in Te Ara Miraka mean that onfarm we will deliver better results so it’s an investment in the farmer. Over time, as well as develop our branded business further it will help add value to the brands,” he says.
Wyeth sees the provenance of food becoming a big concern for consumers.
“For example, our Total Pure brand shows our milk is sourced within an 80km radius of the factory and Te Ara Miraka will be built into the brands as well,” he says.
Small but successful
Richard Wyeth knows that a small company can develop a greater sense of community among its suppliers, which the farmers wanted from the outset.
Wyeth says they enjoy the annual shareholders’ meeting, “having conversations with the directors and being able to see people in the street around town”.
“That plays a huge part and for me it’s fantastic being able to see all our suppliers in one place. With 110 suppliers we can take everyone on the same journey at the same time.”
He says performance reviews are difficult for some people, but they have to be done and help is available to get farmers through these.
Change is inevitable and farmers must be prepared for this in a season full of uncertainty.
“We are very comfortable with where we are placed in the industry. Our strategy has been consistent, our plants are full, our suppliers say we have the best UHT plant in the country.
“So we are well positioned to grow but there is more and more change coming to the industry and we just have to be prepared for that.”
Of the ups and downs of the international market, Wyeth says all these will play out over time; they just have to keep an eye on things as they evolve.
“We know it’s going to be more volatile than it was 12 months ago,” he says.