Farmer backs co-op’s slow but sure evo­lu­tion

Matamata Chronicle - - Rural Delivery -

Fon­terra is tak­ing a step in the right di­rec­tion with Trad­ing Among Farm­ers says a Hin­uera dairy farmer.

Share­holder David Gasquoine said the pro­posal, due for re­lease at the end of the year, re­tained 100 per cent own­er­ship and con­trol, and re­moved the re­demp­tion risk from the co-op­er­a­tive.

‘‘It’s not an op­tion for us to do what we’ve al­ways done. Co-op­er­a­tives al­ways evolve,’’ Mr Gasquoine said. ‘‘They’re a slow mov­ing beast but tend to get things right over time.’’

He said most farm­ers just wanted TAF to go for­ward, and that ‘‘the cur­rent bick­er­ing and sec­ond guess­ing over this is­sue . . . is not in the best in­ter­ests of the co-op­er­a­tive’’.

‘‘The co-op­er­a­tive is like a very large fam­ily and it needs to deal with these is­sues in­ter­nally, not through the me­dia.’’

TAF of­fers farm­ers a choice: they will be able to put shares into a Share­hold­ers’ Fund, re­leas­ing cap­i­tal or al­low­ing them to trade be­tween them­selves.

The co-op­er­a­tive was dis­cussing three op­tions with farm­ers re­gard­ing the Share­hold­ers’ Fund set up, he said.

Mr Gasquoine said the re­cent good sea­sons meant farm­ers were gen­er­ally pos­i­tive but the re­demp­tion risk had not dis­ap­peared.

‘‘In re­ally sim­ple lan­guage, re­demp­tion risk is still alive and well de­spite what peo­ple think, and TAF is sim­ply about pro­vid­ing the co-op­er­a­tive with a per­ma­nent cap­i­tal base.

‘‘If we had a few things lined up – an­other global fi­nan­cial melt­down . . . [or] a drought, then that re­demp­tion risk would still be there. If the worst comes to the worst, share­hold­ers are en­ti­tled to say, ‘I want all my sur­plus shares back’ at the end of the sea­son. The TAF pro­posal is about re­mov­ing that risk from the co-op­er­a­tive.’’

In that sce­nario un­der TAF, he said, farm­ers who wanted to pull cap­i­tal out would have to find an­other farmer will­ing to buy shares, in­stead of go­ing through the co-op­er­a­tive.

‘‘It will be a step for­ward and it needs to hap­pen yes­ter­day. When I say that, I mean the man­age­ment of the co-op­er­a­tive is there to get us, as share­hold­ers, the best pos­si­ble re­turn they can in terms of our milk price and our div­i­dend,’’ Mr Gasquoine said.

‘‘While they are mess­ing around, deal­ing with this sort of in­ter­nal stuff, they’re not adding any value to our busi­ness.’’

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