Farmers own Fonterra? Yeah right
Ithink it’s about time we got some things cleared up around how people think our dairy giant Fonterra operates. The statement I love hearing the most is: ‘‘But you farmers own Fonterra and you should take back some control!’’
And the second one just recently in response to the grandiose five-star functions held over the last fortnight for select Fonterra staff: ‘‘It’s not the farmers’ money they are spending!’’
Alrighty, so let’s start at the beginning.
All the farmers get a vote and that vote is cast on what is selectively put in front of us to vote on.
For example, the three director positions on the board to be filled just lately had three nominations put forward for us to rate, not to vote on.
Do we know how many people put themselves forward to be nominated for those positions? No, we only get to give the three a rating as to how much we like them, they are going to be filling the positions whether we like it or not.
These are positions on the board of directors, who are the decision-makers for the company the farmers own and run . . . [insert rolling eye emoji here].
The other comment about it not being the farmers’ money that is being spent overseas is naivety at its finest.
The farmers who own shares, regardless of how many shares, have a percentage of their dividend retained by Fonterra every year for the purpose of reinvestment in the form of infrastructure and expansion.
That money doesn’t just stay here in New Zealand or the cooperative either. So where else does it go, I hear you ask?
Into steel to build processing plants in other countries so the farmers there can have their milk processed without the outlay of having to invest by buying shares.
Infrastructure for the China farms to get up and running and clearly when things don’t go well in the corporate arena of Fonterra, the lads at the bottom of the pyramid back here, the shareholder/supplier, get their pay axed.
So you see, it is the farmers’ money they are spending, losing and using for all manner of things and, trust me, when we leave the company and no longer need to use the plants, tankers or warehouse staff, we certainly don’t get our money back.
I read a comment somewhere that asked where we would be with all our milk if it wasn’t for the plant operators, tanker drivers and warehouse staff who all play a part in turning our milk into white gold for the company.
Touche, my friend, and where would the processing plants, tankers and management be without our milk?
That there is the problem with the entire business model that is Fonterra.
It has bred an ‘‘us and them’’ mentality, which is hardly surprising when the company itself tries to sing from the cooperative and the corporate song sheet while the music plays out of time.
They also embrace and celebrate mediocrity while paying out performance bonuses for no performance.
The exiting chief executive had a base salary of $2.3ish million, and stood at the helm while we lost $196m but still walks away with his performance bonuses.
We only have to let a bit of water into our vat of milk and we get penalised immediately and you should see how much it hurts financially when a farmer gets a grade for inhibitory substances.
The farmer gets penalised for not performing to the standard set by the company he ‘‘owns’’ but the upper brass can seemingly fall in an effluent pond and come out smelling like roses.
Anyhow, as my dear old dad used to say: ‘‘None of it will matter in 100 years, love.’’
I for one am bloody pleased none of the multi level marketing business model that is Fonterra will matter in our house after October 20 next year, but in the meantime we will endeavour to be compliant, sustainable and nod in all the right places.