Fonterra plan answer to foil raiders

The fear of overseas raiders preying on NZ's dairy industry is behind moves by Fonterra to reduce its exposure to dissatisfied shareholders. The dairy giant has unveiled the third step of a plan to stop millions of dollars washing in and out of its books as farmer-shareholders buy and sell shares reports Stuff. Instead, those shares could be traded among shareholders daily, or the farmers could decide to leave it to Fonterra to buy or sell shares for them at the end of the season. This would put an end to the so-called redemption risk that Fonterra says is holding it back. Chairman Sir Henry van der Heyden said yesterday the fear of not being able to feed growing populations was forcing countries to buy large tracts of land in other nations to grow their own food. The NZ dairy industry with its efficient pasture-to-milk system had been targeted by these countries in the last four to five years. He named Japan, Singapore and Russia and was clearly referring to China when he added that the risk was now heightened. "Fonterra is not uncomfortable with competition, but there has to be a level playing field," he said. "Some of these entities are well-resourced, well capitalised and will take a long-term strategic view, even if it is unsustainable in the short-term. They will have the ability to pay the farmer a bloody good milk price." However, what had been shown in other countries was that this would eventually be to the farmers' detriment, he said. Sir Henry's statement came as Chinese firm Natural Dairy Holdings, which is bidding for 29 Crafar family dairy farms in receivership, hit out at "xenophobic" comments. Spokesman Bill Ralston revealed the firm intended to invest $1.5 billion on the farms, to spend more money buying other farms in both islands and a further $100b building a dairy plant.