SFF keen to reward loyal farmers
It's good to reward shared up and consistent suppliers ...
William Beetham
Beetham Pastural managing director
Silver Fern Farms Co-operative will reward farmers who supply it with livestock a ‘‘patronage reward’’ dividend, as well as a separate payout to other shareholders.
Managing director of Beetham Pastural William Beetham, who fattens lambs on the Kapiti Coast for the processor, said it was an ‘‘exciting development’’ but more needed to be revealed.
‘‘It’s good to reward shared up and consistent suppliers, but what for example if a farmer sells a lot of stock store to another Silver Fern Farms shareholder. That’s an important part of our business so we need to understand these details,’’ Beetham said.
SFF said in a statement it intended to make two payouts a year: one to all ordinary and rebate shareholders (in total
22,000); and another to livestock-supplying shareholders.
Chairman Rob Hewett said the two payments would encourage loyalty in suppliers, at the same time as generating demand for shares from non-shareholder suppliers and under-shared suppliers.
The SFF co-operative owns Silver Fern Farms Limited in a
50:50 partnership with Chinese company Shanghai Maling.
Shareholder suppliers will be offered other incentives including preference on processing space, preferential access to value-added programmes, governance development and invitations to events like its farmer conference and international market trip.
Beetham said, unlike the loyalty programme, these incentives were nothing new.
According to its website, SFF has a policy of paying a minimum of 30 per cent of net profit after tax as an annual dividend, with a target of 50 per cent.
This dividend will be split 50-50 between Silver Fern Farms Cooperative Limited and Shanghai Maling.
Payment will be made during the first quarter of the calendar year from 2018 onwards.
To be eligible for payment, farmers will have to supply a minimum of 400 stock units a year. One lamb or ewe is considered to be one stock unit, while a deer equals six, and a cattle beast 12 stock units.
The co-operative has also launched a new website www.silverfernfarms.coop, and says it is the first New Zealand food co-operative to take up the .coop domain name.
The operating company SFF will continue to have its own silverfernfarms.com website.
Rival Alliance Group has also set up a loyalty programme. Recently it distributed $4.5 million to its farmer-shareholders.
Farmers who supply 100 per cent of their lambs to Alliance are paid an additional 10c/per kilogram per animal, for sheep
6c/per kg per animal, cattle
8.5c/per kg per animal and deer
10c/per kg per animal.