By Pattrick Smellie
The Fonterra Shareholders’ Council, representing the cooperative’s 10,500 shareholder farmers, is sitting on the fence over the plan by the country’s largest multi-national business to allow trading in non-voting units to free up working capital to expand.
The most the council commits to in a statement issued this afternoon is that it supports the “process” relating to the Trading Among Farmers scheme, which will also allow private investors to buy and trade the units, while having no voting power.
The Fonterra board is taking the unprecedented step of seeking a second mandate from farmers at a vote in late June, despite farmers overwhelmingly supporting the TAF scheme in a vote taken in 2010.
That vote followed a protracted process in which an earlier capital injection scheme had been rejected by Fonterra farmers, who are determined to maintain ownership control of the cooperative dairy giant.
Asked whether the council had a view on whether the TAF scheme should or should not go ahead, a council spokesman said there was “no view as yet” and that the council had not expressed a view before the first vote.
Some farmers fear the scheme will pressure Fonterra directors into rewarding unit-holders by suppressing the milk price to farmers, while critics suggest farmers will work against both their own and the national interest if they block efforts to allow Fonterra to grow globally.
Shareholders’ Council president Simon Couper’s statement said it was “only right that the concerns of our shareholders are heard and respected” on the most important decision since Fonterra was established a decade ago.
“There has been a lot of talk recently about ownership and control of the co-op,” said Couper. “Voting is our key control right and we must take responsibility and use it. I urge all farmers to demonstrate your rights and have your say in the future of Fonterra.”
Fonterra chairman Henry van der Heyden said the second vote was necessary because, despite backing for TAF at the first vote, the public comments of concerned farmers were creating uncertainty among foreign joint venture partners and customers.
Couper said maintaining unity in the cooperative was vital.
(BusinessDesk)
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