Farmer lobby Our Co-op to meet Fonterra council
Fonterra farmers opposing TAF call on their watchdog council for answers before share trading becomes a reality, reports Andrea Fox.
The full Fonterra Shareholders Council has agreed to meet a group of farmers still lobbying against share trading among farmers (TAF) but it seems unlikely the critics will leave satisfied.
The opponent group, called "Our Co-op" and a vocal bloc against TAF before a special meeting of Fonterra farmers last month voted in the scheme on a milk solids supply voting basis, wants to know if the council will require controls that ensure continued farmer ownership and control of Fonterra to be written into the constitution as a "prerequisite" of the council's own support for TAF. The group fears that TAF makes Fonterra, a farmer-owned co-operative and New Zealand's biggest company, ripe for demutualisation.
Group spokeswoman Leonie Guiney, a South Canterbury Fonterra farmer, said the group had twice asked formally to meet the shareholder watchdog council to get the question answered but had been given no clear response.
But council chairman Ian Brown was concise enough when the Waikato Times phoned him: "No," he said.
The "controls" Our Co-op wants the council to require to be put in the constitution before TAF is introduced are contained in resolution 2, which was put to last month's shareholders meeting but did not get support.
The resolution proposed that to ensure farmers' continued control after TAF the total number of shares on issue in the capital of the company be reduced from the proposed 25 per cent to 15 per cent.
A bid by the Labour Party to get a 20 per cent limit enshrined in new dairy industry legislation passed last week was voted down by the Government.
Brown said a letter was on the way to the group agreeing to a meeting.
But getting the resolution 2 controls written into the constitution would not be a prerequisite of the council agreeing to TAF, he said.
"We supported TAF and we had worked through those protections . . . in councillors' minds once they saw those protections come through [in resolution 2] they were more comfortable with supporting TAF. We recommended those changes be taken to the special meeting but we can't force shareholders to accept them."
The Fonterra board said it would re-present the resolution for vote at the company's annual meeting later this year because it was in the best interests of the co-operative.
Brown said he believed farmers would support a restated resolution then.
"I disagree that it won't get passed at the annual meeting with council and board support. We are working as hard as we can to ensure that does happen.
"And the board has communicated post-special meeting that if TAF comes into effect before then [the agm] then they will work as though those precautions are in place."
The Our Co-op group also disputes Fonterra's claim that last month's special meeting gave directors a mandate for TAF.
Fonterra said 66 per cent of those who voted on a milk-solids-supply basis was a mandate.
But Guiney said on a shareholder member voting basis, fewer than 50 per cent of the 82 per cent of shareholders who voted supported TAF. Fonterra will not give individual voting numbers, saying votes are traditionally on a milk-solids-supplied basis.
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