TAF

Letting non-farmers in on the lacto action isn't sharing it's just greed isn't it? That's what "moving forward" looks like. The farmers - well 2/3 of them anyway - want to make a quick buck. From what I've heard the TAF issue is not just limited to farmers - maybe because the other resolution didn't pass (? - not sure on this, see below.) They are setting a precedent for share privatisation, but there's way too many dollar signs blinding them to the erosion of the co-operative basis of their wealth. Chinese interests, I suppose, will be plunging deep into this virgin area now they have secured the Crafar Farms and the Fonterra votes that went with them, along with all the other European and American interests that have been buying up dairy acreage.

Who will the farmers in the future be co-operating with exactly and what will that co-operation look like?

Fonterra:

Fonterra shareholders have voted in favour of implementing Trading Among Farmers.

The resolution for Trading Among Farmers received a 66.45% vote in support at Fonterra's Special Meeting today, with two out of every three votes in favour.

Fonterra Chairman Sir Henry van der Heyden said the final vote on the share trading scheme attracted a record voter turnout.

"Our farmers have voted in big numbers, representing 85% of the Co-op's milksolids. It is great to see so many taking part and having their say. "Now we can move forward with this important evolution in our capital structure," he said.

"We've spent six years talking about capital structure and it has been a rigorous debate and process. Our farmer shareholders have made a great contribution and the final version of Trading Among Farmers is all the richer because of that input."

Sir Henry said TAF ensures a stable, permanent capital base for the Co-op and secures its future.

The board and management are the usual instigators of these deals in any sort of firm. Mutual societies, co-ops and other non-company formats are prone to be privatised and floated when the management start making policy rather than the actual owners - and this is probably the case with Fonterra.

Fonterra: 

Sir Henry said the Board listened to farmer shareholders' concerns on preserving 100% farmer control and ownership and the integrity of the Farmgate Milk Price.

"We asked our farmers to vote on constitutional changes which would tighten limits on the size of the Fonterra Shareholders' Fund, which is fundamental to 100% farmer control and ownership, and preserve the integrity of the Farmgate Milk Price. This resolution required a 75% vote and received 72.8% support."

The Board will take this resolution back to the next annual meeting in November and will seekShareholders' Council support for this. In the interim, further planning on Trading Among Farmers will proceed within the parameters outlined in Resolution 2. Sir Henry said the Board believed this was in the best interests of the Co-op.

Fonterra Chief ExecutiveTheo Spierings said the vote for TAF means Fonterra can be in charge of its own destiny.  "TAF will stop money washing in and out and give the Co-op a stable, permanent capital base to deliver on its Strategy Refresh.

Other farm types are supportive and optimistic:

TAF was designed to ensure farmers retained control of the company so that there would not be pressure to increase dividends and/or share price by reducing the price of milk.

Outside shareholders might have a voice but they won’t have a vote, control remains with farmers.