Farmers vote for trading

At the first day of the South Island Dairy Event in Dunedin yesterday are  Fergus Crowch (left),...
At the first day of the South Island Dairy Event in Dunedin yesterday are Fergus Crowch (left), Kevin Ryan and Sam Mallard, all from Canterbury. Photo by Peter McIntosh.
Fonterra is still working towards a November launch for Trading Among Farmers but that will be dependent on market conditions, chairman Sir Henry van der Heyden says.

The resolution for Taf received a 66.45% vote in support at a special meeting yesterday, while a resolution on constitutional changes for Taf failed to meet the threshold.

The pre-conditions in the constitution still needed to be finally satisfied, including the support of the Shareholders' Council.

The board was confident the necessary changes to the Dairy Industry Restructuring Act and the waivers were on track for that to happen. The board would determine an exact launch date closer to the time, Sir Henry said.

Politicians waded into the debate yesterday, concerned about future farmer control and ownership of the co-operative.

In April, Fonterra announced it would hold a special meeting of shareholders to give them a final vote on Taf and "unify the co-operative".

Calls for unity were made yesterday.

Taf ensured a stable permanent capital base for the co-operative and secured its future, Sir Henry said.

"We broke new ground with the formation of Fonterra and now we have the support from our farmer shareholders to refine that model and to break new ground again.

"As in the past, our farmer shareholders will now get behind the co-op as we move forward. That's what we all want, a united Fonterra."

The final vote showed most agreed Taf was a fundamental pillar for the co-operative and the board was "absolutely unanimous" in the belief that it was a lasting solution.

Chief executive Theo Spierings said the vote meant Fonterra could be in charge of its own destiny.

Federated Farmers dairy chairman Willy Leferink called on the co-operative to unite.

Theo Spierings.
Theo Spierings.
Whatever the result, the organisation had wanted it to be a clear one "and the shareholders have delivered it", Mr Leferink said. Federated Farmers was disappointed the second resolution did not quite make it, as that was the important one around putting controls on Taf.

There had been a lot of debate and some shareholders might feel embittered by the result and he asked them to "hang in there" to see if the many promises made were delivered.

Federated Farmers Otago dairy chairman David Wilson said it was the right move to have the second vote and he thought Fonterra would probably be "a little surprised" at the number who voted against it.

"Ultimately, we need to unify everybody behind the one direction and then go for it," he said.

The Green Party said the result put family farmers at risk.

Its agriculture spokesman, Steffan Browning, described it as "trading against farmers".

Allowing non-farmer investment did not fit with the co-operative model. Pressure would be 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."

Labour's primary industries spokesman Damien O'Connor said changes proposed by Labour were needed to protect farmer control and ownership.

"When the law changes voted on by farmers today first came in front of Parliament, we said protections need to be locked into law because putting them into Fonterra's constitution is not enough. Our fears have been realised with constitutional amendments to lock in farmer ownership only receiving 72.8% of the vote. Changing the constitution requires a 75% vote, so they haven't been adopted."

If trading among farmers went ahead without Labour's proposed amendment, control of Fonterra and its profits could pass to non-farmers and potentially out of New Zealand, Mr O'Connor said.

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