Ex-sharemilkers want safeguards
A Waikato sharemilking couple left tens of thousands of dollars out of pocket by their former farm owner are urging Fonterra to overhaul their milk payment rules, saying other sharemilkers risk financial ruin.
Lisa and Ian Handcock say the emotional and financial stress of the past five years has effectively driven them from the sector.
And they warn other sharemilkers could follow because of inaction by dairy giant Fonterra.
In 2005 the Handcocks signed a three-year sharemilking agreement with Coromandel Land Trust Ltd whose director was Lance Burt.
The contract related to Burt's Whangapoua farm.
In April 2007 Burt cancelled their sharemilking contract and had Fonterra pay $81,930 of milk payments into his company account.
Under the Sharemilking Agreements Act, withheld funds should be deposited into a solicitor's trust account.
Despite a lengthy arbitration process, which found in the Handcocks' favour, Burt failed to pay the owed money.
The Handcocks, who now live in Miranda, later contacted police who subsequently charged Burt with one count of dishonest use of a computer.
He was found guilty following a defended hearing and last month was sentenced to nine months' jail and ordered to pay $81,930 reparation.
The Waikato Times understands Burt is appealing against his conviction and sentence.
Mrs Handcock said Burt's offending and Fonterra's lack of support had "left a bitter taste in our mouth".
"When Fonterra put our money directly into Burt's company account that put us under 100 per cent more pressure because there were no safeguards protecting our money," she said.
"In our case, Fonterra didn't follow the rules and didn't take care to ensure a crime wasn't occurring.
"Our phone has been running hot with people ringing with horror stories about what's happened to them as sharemilkers. Fonterra says sharemilkers are the future of the industry but their behaviour has contributed to our financial situation and we can no longer sharemilk."
The Handcocks were awarded Thames Valley sharemilkers of the year in 1996.
"I believe Fonterra do owe sharemilkers a duty of care and their practices should reflect that," she said.
Fonterra director milk supply Steve Murphy said under the Sharemilking Agreements Act, farm owners could withhold payments or deduct from them.
Although rules state any withheld funds must be deposited in a solicitor's trust account, this was not followed in the Handcocks' case.
Mr Murphy said Fonterra was not involved in the arrangements between farmers and sharemilkers, "so it is not appropriate for us to take sides in any dispute, or to hold funds."
"While it's disappointing what has happened in this case, there are good systems in place to deal with these issues, including mechanisms under the Sharemilking Agreements Act and regulations for dealing with money which is the subject of dispute between farmers and sharemilkers. We do not believe it is necessary to make any changes to these mechanisms by putting Fonterra in the middle of a dispute resolution process."
Federated Farmers national sharemilkers section chairman Ciaran Tully said dispute resolution clauses in sharemilking contracts offered both parties "a good degree of protection".
"The problem I see is Lance Burt's big sin was he got Fonterra to put the cheques into his own account and that's a big no-no. If the sharemilker wins the dispute, which the Handcocks did, then it's not his money, it's the sharemilkers'."
Mr Tully said there were about 4500 sharemilkers nationwide, and fewer than 20 cases a year of serious disputes.
Mr Tully said that being the case, "the Handcocks are probably an extreme example of a bad call on the owner's part". email@example.com