A challenge has been issued to MPs to put protections around Fonterra's Trading Among Farmers (TAF) scheme into legislation currently making its way through Parliament.
The call has been made by Federated Farmers dairy chairman Willy Leferink at the farmer group's 2012 national conference in Auckland.
This week farmer-shareholders voted in favour of TAF in a 66 per cent "yes" vote, but not enough of them in favour of a second resolution to alter Fonterra's constitution and limit the size of the Fonterra Shareholder Fund. The second resolution required a 75 per cent vote of support, but stopped short at 72.8 per cent.
Fonterra chairman Sir Henry van der Heyden said the resolution would be taken back to the dairy co-operative's annual meeting in November because it was in the company's best interests.
Leferink said yesterday that though the constitutional amendment resolution narrowly failed the vote, it was what a majority of Fonterra shareholders wanted.
"My message to MPs is to listen to what a majority of Fonterra shareholders voted for and to put that into effect via the DIRA amendment [Dairy Industry Restructuring Amendment Bill] now before you. The risk is a 'B constitution' nobody wants sitting there like a ghost from the past, given Fonterra's AGM is still months away," he said.
"Take the constitutional amendment that narrowly failed and put that into the DIRA, especially the size of the Shareholders Fund, the number of dividends any one farmer can trade into it, and the maximum number of units any one outside investor can hold.
"While Parliament's at it, what about allowing Fonterra to set its own share-price policy?" Leferink said.
The yes vote for TAF means sharemarket investors will be invited to buy dividend-carrying, non-voting units in up to 25 per cent of total Fonterra shares in a Fonterra Shareholders Fund.
TAF for the first time allows non-farm owners to buy an interest in the world's biggest dairy exporter.
Some farmer-shareholders have expressed concern that these outside influences might lead to loss of total farmer control over their co-operative, which is why limits on the size of the fund are seen by some as an important backstop.
- © Fairfax NZ News
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