Fonterra compo for Oz farmers

Fonterra Australia has offered aggrieved farmers a compensation deal for reducing its last season’s milk price, but initial reaction from some is that it does not go far enough.

Last week it was reported the dairy giant might owe its 1400 suppliers $64 million.

But it said it would pay retired Fonterra suppliers who left the dairy industry between April 30, 2016 and May 10, 2017 and did not supply any other company in that period, 40 cents per kgms. The payment would be a lump sum.

Melbourne lawyer David Burstyner, who is heading a class action against Fonterra, said he was still processing the news.

‘‘It looks like it’s 70c short, so we are not calling the dogs off yet,’’ he said.

Tony Marwood, chairman of the Fonterra farmer milk supplier body, Bonlac, said it was a ‘‘good news story’’.

Besides announcing the compensation, Fonterra provided a forecast full year farmgate milk price range of $5.30 to $5.70kg/ms for the 2017-2018 season. An additional payment of 40c per kgms payable for the season would also be made, bringing the forecast full year range to $5.70 to $6.10 per kgms.

Fonterra Australia managing director Rene´ Dedoncker said its business was in a stronger position. Under its milk contract with Bonlac, Fonterra has been legally obliged since 2012 to match or top the farmgate price paid to farmers by rival Murray Goulburn. ’’We said that we would consider Murray Goulburn’s recent announcements including the decision to forgive its milk supply support package. We’ve consulted with the Bonlac Supply Company on the best way to respond to our suppliers,’’ Dedoncker said.