Animated discussion at Silver Fern Farms' AGM

A lack of rebate, the chief executive's salary and poor lamb prices fuelled the debate at Silver Fern Farms' annual meeting in Gore yesterday.

However, chairman Eoin Garden was not surprised by the comments that led to more than two hours of discussion.

"When lamb returns drop there is a lot of tension and criticism and suppliers play the market," Mr Garden said.

"But when we had high returns last year, we heard from no-one."

Mr Garden agreed it was a challenging time for lamb suppliers with the global recession impacting on key markets and the volatile currency driving down sheep farmers' returns.

Several of the 120 shareholder suppliers at the meeting voiced their concerns about Silver Fern Farms' decision not to pay a rebate last year.

It would have come as a welcome relief for farmers who have faced a drop of more than $20 per lamb this season.

However, Mr Garden said it would have been contradictory to pay a rebate as only a small profit ($43.4 million) was made and more capital was needed to strengthen the balance sheet.

"We considered it [paying a rebate] carefully."

Waikaka farmer Hugh Gardyne condemned the almost-$870,000 salary that was being paid to Silver Fern Farms' chief executive Keith Cooper, as indicated in the annual report.

But, Mr Garden defended Mr Cooper's salary and said that while it was competitive it was in the medium range for a person managing a company with a $2 billion turnover.

Looking ahead, Mr Garden said it was important to invest in the marketplace and emerging markets as well as in technology and innovation which would help improve returns to the business and suppliers.

"We need to invest beyond the farm gate."

Silver Fern Farms was still open to a possible merger with the Alliance Group and would continue to explore avenues for consolidation, Mr Garden said.

However, it must be based on sound business principles and commercial logic.

"It's about getting shareholders to agree and take responsibility for the long-term outcomes of the industry."

- © Fairfax NZ News

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