Deep divisions over TAF proposal

Willy Leferink
Willy Leferink
Debate continues to rage over Fonterra's controversial Trading Among Farmers proposal, with Federated Farmers dairy chairman Willy Leferink saying the lobbying from all sides is "frankly unbelievable".

What was desperately needed was "cold hard facts" about the value proposition TAF offered to farmer-shareholders, Mr Leferink said.

He was saddened by Simon Couper's resignation last week as chairman of the Fonterra Shareholders Council.

Mr Couper quit citing his "lack of comfort" with some aspects of TAF.

"Simon is a man of honour and it speaks volumes that he stuck to his guns under what is an intense pressure-cooker environment.

"That's something I know only too well.

"The lobbying is frankly unbelievable from all sides," he said in a statement.

The council, which resolved last week to support the introduction of TAF, had been "deeply involved" at all stages of the development of the concept for implementation and had also conducted its own due diligence process with independent advisers involved, Ian Brown, who replaced Mr Couper as chairman, said.

Throughout the deliberations during the past two years, one of the most important considerations had been the ultimate size of the Fonterra Shareholders Fund and how that might be structured to best protect the co-operative for future generations.

Considerable emphasis had been placed on the terms of the fund risk management policy.

The council had been focused on ensuring TAF would not threaten 100% farmer shareholder ownership and control or the integrity of the milk price, he said in a statement.

South Island Dairy Farmers Ltd managing director Paul Brown believed TAF, if implemented in its current form, potentially would "seal the end of the industry as we know it".

Farmer confusion over TAF was rife, due to its complexity, size and legal language "all under the disguise of simple trading of shares between farmers".

It was an extremely large and complex document which very few clearly understood, Mr Brown said in the dairy livestock company's recent newsletter.

Most dairy farmers wanted to grow grass and milk the cows efficiently and profitably.

Most were not avid share traders, money-market watchers or experts on the fine print of share trading.

"The industry is already being dictated to by enough outside parties who are not always right or understanding of our industry - environmental groups, bureaucrats from the national tagging system.

"Do we really want to add friendly investors to the list?" he said.

The world was "littered with broken dairy companies" who had let dry shareholders/friendly investors into their business, breaking the simple, effective, proven, co-operative model.

For the industry to survive, the model of wet shares only and on a co-operative basis run solely by dairy farmers must be maintained, Mr Brown said.

The "normal" dairy farmer must become informed by knowledgeable dairy farmers to truly understand what the issues were before the final TAF vote on June 25. It was not the time to be apathetic, he said.


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