Fonterra council cops lapdog flak over TAF

Labour MP Damien O'Connor has voiced his disappointment at the Fonterra Shareholders' Council endorsement of Fonterra's new capital structure.

The Opposition spokesman on primary industries was in New Plymouth on Tuesday with colleague Andrew Little to see first hand the unique aspects of dairy farming in Taranaki, environmental management and labour requirements, and to talk to farmers.

"Instead of being a watchdog for shareholders, [the shareholders' council] has become a lapdog," he told the Taranaki Daily News at Grassmere Farm in Egmont Village. Taratahi Agricultural Training Centre is the contract milker on the farm.

O'Connor said he believed Fonterra's new capital structure, Trading Among Farmers (TAF), represented a huge risk to the company.

"The world is watching with astonishment as Fonterra embarks on this structure. The reasons for TAF have been overplayed by the company.

"The redemption risk could have been managed in different ways. Now outside investors will have an influence over the milk price and Fonterra's direction. Let farmers beware."

He said it was essential to attract youngsters to the dairy industry and to provide them with a pathway to acquire the necessary skills.

With huge investments in infrastructure, often with advanced technology, dairy farms required people with a high level of technical skills to run them. Staff also needed sound knowledge of animal welfare and animal health.

Organisations like the Taratahi Agricultural Training Centre, which had campuses and contracts to run farms in Taranaki, were needed to provide the level of training the industry required.

O'Connor said there was a growing awareness by farmers and farming leaders they would be "clobbered" if they didn't treat the environment properly.

Taranaki had similar advantages to the West Coast of the South Island, with great grass, good moisture levels and a climate suitable for dairying. Its free- draining soils meant farms didn't turn into quagmires, as happened in some other areas of the country.

Dairy NZ's focus on river catchment management was an acknowledgment that the huge variation in climate and soil types meant a "one size fits all" approach to the environment was not appropriate.

O'Connor said the lack of understanding between New Zealand's rural and urban communities was two-sided, although he believed rural people had a lesser appreciation of their urban counterparts.

"The rural sector has to work harder. They can't take anything for granted, otherwise there will be mistrust on environmental issues."

While he thought Taranaki farmers were optimistic for the future, he had also noted their disappointment at this season's payout cutback to $5.25 a kilogram of milk solids for the farmgate milk price.

"The persistently high dollar is not helping. The Government's continuing sole focus on inflation is wrong."

O'Connor said a multi- objective focus that also included job creation could help the exchange rate.

Taranaki Daily News