Farmer backs co-op’s slow but sure evolution
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.’’