TAF still leaves control with farmers

June 26, 2012

The Green Party shows it doesn’t understand business, again,  in its reaction to yesterday’s vote by Fonterra shareholders to approve Trading Among Farmers.

Today’s vote by Fonterra members to accept the proposed Trading Amongst Farmers scheme puts family farmers at risk, the Green Party said today.

“It’s not trading amongst farmers but trading against farmers,” said Green Party agriculture spokesperson Steffan Browning.

“Allowing non-farmer investment does not fit with the co-operative model; it will put the pressure on to increase the return to investors at the cost of good quality farming.

“TAF will create a trade-off between having a higher share price and farmers getting a lower price for their milk.

“Farmers have different interests to outside shareholders. Those farmers working to produce high quality products and improve their impacts on the environment could lose control of their own co-operative.

Goodness me, this must be the first time anyone from the Greens has acknowledged that farmers work hard to produce high quality products and improve their impacts on the environment.

But the second half of that sentence is rubbish.

TAF was designed to ensure farmers retained control of the company so that there would not be pressure to increase dividends and/or share price by reducing the price of milk.

Outside shareholders might have a voice but they won’t have a vote, control remains with farmers.

Fonterra is New Zealand’s biggest company. It is in the interests of suppliers and the country that it continues to grow and prosper.

TAF will enable it do this better without in any way threatening its co-operative structure or the power that lies with its supplying shareholders.

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