Otago shareholders in Fonterra appear supportive of the co-operative's need to restructure its capital, but are still to absorb the detail of what is proposed.
A common view among dairy farmers spoken to at a field day in South Otago yesterday was that they understood the company needed to act to strengthen its balance sheet, and after a cursory look, they felt satisfied the proposal to allow share trading among farmers might solve that.
Fonterra has started consulting on a proposal to allow farmers to trade shares among themselves, to help create the exchange for the shares, but also to provide farmers with flexibility for shares they own.
Clydevale farmer Mark Shore said Fonterra had to act to address redemption risk and the vast amount of money moving in and out of the company's accounts as it reconciled share ownership each year.
Farmers must own one share for every kilogram of milk solids produced, and each year they cash in or buy extra shares to balance production with shareholding.
Mr Shore said the situation needed addressing for the long-term good of the co-operative and the dairy industry.
"It's not about the short term, it's for the generations to come," he said.
Other co-operatives have suffered because they did not address the threat of redemption risk, and he was concerned the New Zealand dairy industry could go the same way.
"We're the envy of everybody and we've got to stay that way."
Mr Shore labelled as scaremongering concerns from a competing dairy company that Fonterra's share price would fall because of the limited market, which could have wider repercussions.
Other farmers spoken to were generally in favour of Fonterra's proposal, but declined to comment until they had considered the detail.
Mathew Sutherland, from Adams Flat, said redemption risk had to be addressed, but he hoped the proposal to allow trading between farmers would be kept simple.
Inch Clutha farmer Mark Watt was supportive but wanted to ensure business entities would not "clip the ticket" during share transactions.
Both hoped the proposal would be simpler than the 2007 idea to publicly float a portion of the company, a proposal canned before being put to farmers.
Shareholders will vote in early July, with 75% support needed.
