apple angst Euro crisis crippling Nelson growers. page 11
what a worker If you loved those old 4WDs you’ll like this ute. page 32
Rural NEWS
First wheat Renowned plant breeder’s first NZ-bred lines come to fruition.
page 12
to all farmers, for all farmers
february 7, 2012: Issue 508
www.ruralnews.co.nz
Stop TAF now! a n d r ew swa l low
RALLY BEHIND your Shareholders Council and empower it to veto TAF. That’s the plea from South Canterbury dairy farmer and Fonterra shareholder Leonie Guiney in the wake of
last week’s 50 meetings on the proposed Trading Among Farmers scheme. But her reasoning isn’t so much what was said at the meetings, as the content of MAF’s consultation paper on Fonterra’s milk price setting, capital restructure, and share valuation which was
Farmers rally to repair wrecked fences NELSON FARMERS Ian and Barbara Stuart couldn’t ask for better friends than Daniel Rater and Andrew Noakes (right). Last week they were among six farmers from the district who ‘downed tools’ on their own properties to spend a day repairing fences ripped by December’s floods and slips on the Stuart’s Cable Bay farm. But with several kilometres destroyed over the steep country, the task is far from done. Gavin O’Donnell, provincial president of Federated Farmers Nelson, mustered last week’s posse and hopes more will come forward. “I’d like to emphasise how great it has been having these guys here, and like to think when we organise another day there may be others with a little more spare time.” The Stuarts say they appreciate what’s been done, as it’s “really hard work,” on such country.
released the week prior. “It’s all so completely tied together. Government sees TAF as an opportunity to have an influence on our milk price.” She urges all shareholders to read that paper, and in particular clause 41a. It states ‘the interests of external
investors to maximise Fonterra’s profit would provide some counterbalance to the interests of Fonterra’s farmer-shareholders, whose interests are primarily to maximise the milk price Fonterra pays them as suppliers.’ “This isn’t about the 5% of milk on the domestic market. This is about all our milk, including the 95% we export,” she warns. At the TAF meeting she attended Fonterra said Government or Commerce Commission annual audits of milk price would be ‘frustrating, but we can live with it’. “If our board doesn’t consider Government regulation of our milk price to be a major issue then we’ve got a major governance failing.” Redemption risk, an argument from TAF, can sensibly dealt with by retentions, Guiney adds. While Guiney is calling for shareholders to throw out TAF completely, Fonterra chairman Sir Henry van der Heyden told Rural News he’s confident farmers will accept the co-op’s preferred option, based on the feedback he received at seven farmer meetings. “At the end of the meetings I have attended, a vast majority of farmers are telling us to just get on with it.” Van der Heyden says farmers have been asked to give feedback online this month. “We have left it up to our farmers to decide which option they prefer.” He says farmers are angry with the Government’s proposed changes to raw milk regulations and half the time at the meetings was spent on that issue.
Fonterra tips op2 OF THE three TAF options now on the table, Fonterra is recommending option two, a farmer-controlled trust to hold traded shares. This option will give farmers “the comfort of direct control and ownership of the custodian”, according to Fonterra’s paperwork. The Farmer Trust Custodian would be owned by a trust controlled directly by farmer shareholders. The other options are a custodian 100% owned by Fonterra, or individual farmers retaining legal title to shares they place with the fund. Fonterra farmers were told they will collectively retain legal title to shares placed with the fund without additional layers of administration that would potentially make TAF too complicated to work effectively. In contrast, keeping legal title with farmers carries significant downside risk because of its complexities and potential for value destruction, it says. “The more complicated TAF becomes, the greater the need for detailed explanations as to why TAF needs to be so different to other investment opportunities,” farmers were told. The co-op says the custodian approach is a straight forward solution that would achieve TAF objectives. It admits it’s not been explained as well as it should have in the past but remains confident TAF can be launched in November. A final TAF package is expected before the board in the first half of this year for approval. The Shareholders Council will get the proposal by August.
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