Dairy farmers have month to commit

Dairy farmers have a month to commit to a new payment system set up by Fonterra to ensure sharemilkers receive all the payout they are entitled to.

The milk payout is made up of two portions – a milk production portion based on output and a value-added part based on actual profit.

Fonterra has changed the value-added portion to a dividend that must be paid to the farmer shareholder. Sharemilkers are concerned some farmers may not fulfil their payment obligations and pay out their entitled portion.

Fonterra has created a new payment system that allows it to take, out of the milk-price portion, the equivalent dividend amount owed to the sharemilker.

However, the shareholder farm has to provide written confirmation to join the scheme – the Dividend Related Payment Adjustment (DRPA) – by February 28.

Federated Farmers sharemilkers section chairman Matthew Richards said the paperwork had been posted to each Fonterra shareholder and they had to sign it so the payment terms agreed to between the sharemilker and farmer could be honoured.

He urged sharemilkers to approach their farmers and discuss the matter so the paperwork was filed by the deadline.

- © Fairfax NZ News

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