Falklands : Falkland Islands Development Board Meeting Report 18 April 2006
Submitted by Falkland Islands News Network (Juanita Brock) 20.04.2006 (Article Archived on 04.05.2006)
Find out what happened during this vital board meeting.
FALKLAND ISLANDS DEVELOPMENT BOARD MEETING REPORT
18 APRIL 2006
By J. Brock (FINN)
A meeting of the Falkland Islands Development Board took place in the Liberation Room of the Secretariat at 0900hrs on Tuesday, 18 April 2006. Present were Cllr. Clausen (Chair), Cllr. Davies, Mr. Julian Morris, General Manager of the Falkland Islands Development Corporation, Mr. Tim Cotter (FIDC),Mr. Stuart Wallace, Mr. Roger Spink, Miss Bernadette Lang (Financial Controller), Mr. Neil Judd (DOA), Mr. Chris Simpkins (Chief Executive), Mr. Michael Probin (Camp Economy Presentation) and Ms. Sue Gyford (Minutes) Mrs. Leona Roberts stood in for Mrs. Connie Stevens for Tourism.
After interests were declared and the minutes of the meeting held on 15 March 2006 confirmed, matters arising were discussed.
The FIDC General Manager reported that the past few weeks had been generally busy with everyone doing a good job. Staff maternity leave had been sorted out and Nula McKay from Highlands and Islands Development Corporation would come on a two year contract as Business Manager. She starts in the second week of May.
The TAMAR is due in dry dock on Friday to rectify damage to her propeller.
The draw-down of £40,000.00 has been approved for a coastal shipping project. Enquiries have been received with reference to Coastal Shipping port tenders.
FIDC have purchased a Double Dumping Machine. An advert will go to the media for expressions of interest in operating it.
The Stanley Dairy has received funding of £100,000.00 for pasteurisation and other improvements with an option to come back for more next year. The Reynolds team have done an excellent job and should be commended for it.
Tony Doherty, an expert, has visited and met relevant people and the Board, who were impressed with his knowledge and practical insight. (Not clear what his field off expertise is.)
David Lambert, a wool expert visited and will produce a paper. Practical suggestions are to be made in the paper that will be discussed in the restricted section of the meeting.
PWD has come up with a design for the Sea Lion viewing area at the Gulch on Sea Lion Island. There is no budget for it and a quote for the works is yet to be received. Responsibilities for Health and Safety would be for the land owner.
Cllr Clausen mentioned that there was a grey area as to who had the responsibility for Health and Safety on Sea Lion Island. Was it tourism or was it the land owner.
The dockyard project was discussed and Stuart Wallace asked if people would be working together on the project. At present, no one was working as a team on the project. Julian Morris said he would like a Stanley-wide approach. Chris Simpkins mentioned that he sees a strategy coming out and that either FIDB or Tourism would be the lead agency for the development. FIDC would fund individual elements and Tourism would fund the development.
The FIMCO update showed that the Company was run operationally well but was not making a profit due to a drop in the per head price for lamb from £27.00 to 21.80 per head. The company needed an extra £65,000.00 to get through the year. Meat was sitting at Tilbury due to paperwork. Roger Spink said that on 29 March there was an EX-CO paper saying that no more money would be needed for this season. Now, on 18 April – what happened? How accurate were the figures that Mr. Morris had just given. Mr. Morris said that the figures were the best estimate he could come up with.
Reasons for the decline in sales and revenue include a good growing season in New Zealand, the loss of revenue from skins, the decline in price per head for lamb. Two weeks ago 40% of the Abattoir production was unsold because potential sales had dried up. Stuart Wallace said that stakeholders in the Abattoir went into it with their eyes open. Roger Spink mentioned that he was on the board at the time and did not go for it.
Chris Simpkins reminded the board that there were some positive aspects that would be silly to ignore. The team was productive and worked well together and the Abattoir and FIMCO never were intended to be a stand alone business. Farmers would be in serious difficulty if they didn’t have the abattoir. Roger Spink mentioned that there has been a significant reduction in the wool clip because farmers are producing meat sheep as well as wool.
New Zealand lead as far as frozen lamb was concerned and the Falklands had to do their best with the competition. In the European Union people were moving back to beef. Richard Davies mentioned that there needed to be a long-term strategy for farmers. Andrea Clausen wanted to know if there was a ball park figure for the Abattoir subsidy and what was an adequate subsidy given the condition of the Camp economy.
Chris Simpkins said the plans were constantly modified because of external forces. Eighteen months ago it was thought that there would be a break-even situation or maybe a small profit. Andrea Clausen said that the level of subsidy was an FIG issue and not one for the board. Roger Spink mentioned that the Abattoir was built with no real plan of how to use it.
Julian Morris said it was key to run the Abattoir as a commercial business and to do it the volume needed to increase. Neil Judd made the point that it was important to farmers to sacrifice wool to make money by selling meat. They can make more by selling wool and meat. Roger Spink said that it was a false economy when FIG subsidised for incentives to encourage changes that make farming profitable. Julian Morris concluded the segment by saying that we needed a dual purpose sheep business environment and we need to look at the global trends and figure out where the Falklands fit into it.
Michael Probin gave a presentation about the Camp economy that included charts and graphs about where we stand in the Global context in Agricultural GDP, greasy wool production from 1961 to 2005, World Wool exports from 1961 to 2004, World and Australian Exports of greasy wool 1961 to 2004, wool production in Australia and in the Falkland Islands and price of greasy wool from 1961 to 2005.
He then went on to Mutton production with charts and graphs about mutton and lamb exports 1009 to 2004 and he compared that with the next graph showing exports of greasy wool from 1990 to 2004. He then showed figures from our neighbours and compared them with our production.
The Rural Economy slides included graphs about sector analysis in wool, wool and meat, wool meat and tourism, wool and rural services, tourism only, dairy, aquaculture and other. The graphs showed that farm profitability was variable and that if farms had an extra £2,000.00 of taxable profit, 88% of the Camp businesses would have been profitable.
Another graph showed the estimated change in incomes in Camp. It showed that between 2003 and 2004, wool price dropped 60% and this implies 40% reduction in Farm incomes over that period. Other graphs showed changes in Camp tourism activity 2004 – 2005 that showed a 15% rise over the two years. Another graph showed the difference between the estimated value of the wool clip and the value of the wool clip adjusted for the average greasy wool price that showed 4% above the trend price.
An update on the aquaculture project followed with Julian Morris impressed with the work that has been done before. Stuart Wallace had a meeting with Dr. Brendan Gara and was impressed with him. Chris Simpkins said that the board would want to see a strategy for aquaculture before seeing something emerging. Julian Morris added that a strategy would be apparent in six months. There was a budget of £20,000.00 for travel to trade markets in Chile and Scotland as well as half of the money for projects. Stuart Wallace said it would be good to have his input for the Aquaculture Bill that now is out for consultation.
The Reflections Flat would be renovated and central heating put into the whole Reflections building. There was provision for this in the budget.
In the financial update Miss Lang said that most of the budget had been spent.
After the presentation Miss Lang gave a run-down on the accounts
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