Farmers heavily back board

Fonterra's 13,000 farmer shareholders have voted overwhelmingly to retain control of the country's biggest industry and give it more money to develop its global business structure.

Key capital restructuring resolutions were passed by 89 percent of votes recorded at the company's annual meeting in Ashburton yesterday.

Fears of opposition forces and proxy blocks preventing the 75 percent threshold being reached were swept away as farmers threw their support in behind the board's proposals.

The voter turnout was 47 percent of the eligible 1.3 billion votes, massively higher than any other annual meeting vote, which is usually 10-12 percent.

The strong vote was undoubtedly assisted by the company's 95 cents per kilogram lift in the advance milksolids payout a week ago, most of which will be paid before Christmas.

Chairman Sir Henry van der Heyden said the high vote expressed "great confidence in the co-operative and future generations of farming families will look back on this day as a significant step in Fonterra's evolution".

Leading up to the vote, 77 local meetings around the country were attended by 3500 farmers.

Fonterra Shareholders' Council chairman Blue Read, of Pukearuhe, said he had never seen a more genuine consultation process. Shareholder feedback had been listened to and acted on.

Mr Read said if only half of Fonterra's farmers take up the chance to lift their shareholdings to 120 percent, that would raise $450 million in capital for the company, "so this is virtually a $1 billion dollar decision today".

He said the opportunity to buy extra shares equating to 20 percent of their milk production, on top of their 100 percent co-operative entitlements, "gives farmers an alternative investment".

"Farms have been tremendously over-valued for some time and this will give farmers another investment avenue, where their hearts and souls are, in their dairy industry rather than in land."

Federated Farmers dairy vice-president Willy Leferink calls it "an exciting, revolutionary time for Fonterra and a victory for the co-operative model".

"Fonterra has been built into the world's largest dairy exporter as a co-operative and will grow much larger as a co-operative. Farmers are canny business people. In backing the capital structure review so heavily they are prepared to put their chequebooks where their mouths are."

A further vote is still to be held next year on structuring a system for farmers to trade shares among themselves.

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