Disquiet over Fonterra’s controversial Trading Among Farmers (TAF) proposal continues to grow, after the resignation of a sector leader. Debate among farmers is running hot in what is described as an «intense pressure-cooker environment».Dairy-sector leaders are hailing Simon Couper, the man who resigned as chairman of Fonterra’s Shareholders’ Council due to his concerns over Fonterra’s latest TAF proposals, as a «man of principle».
Couper quit as chairman and a council member on Thursday, saying he believed the TAF model would not deliver 100 per cent ownership and control of the dairy co-operative to Fonterra’s farmer shareholders.
His key concern is the size of the Shareholder Fund (public investment units), for which Fonterra on Wednesday announced it was proposing new size restrictions. Couper said the latest proposals did not go far enough.
While Fonterra was keeping its cards close to its chest on the new size proposals until farmers received the information, it was expected to be 15 per cent to 25 per cent.
«A threshold of anything over 15 per cent puts the co-operative at risk,» Couper said.
«My concern is if the fund gets too big, things get blurred – you have two competing interests in the organisation.
«The biggest prize for farmers is the milk price. The dividend on top of that is return on our investment.
«The risk and fear is that the dividend will grow at the expense of our milk price. That has ramifications for the share price.
«If the fund gets too big, we run the risk of losing control economically.»
Couper said it was nice to hear his stand was being saluted, but he was more concerned about ensuring the co-operative was an enduring one.
«TAF theoretically provides a unique opportunity for our co-operative, but absolutely must have complete safeguards around ownership and control. Farmers must realise that TAF will put us on a path that has the potential to become a slippery slope.»
Federated Farmers dairy chairman Willy Leferink and Waikato University agribusiness professor Jacqueline Rowarth hailed Couper as a man of principle.
Couper had to stand down when his views and the views of the Shareholders’ Council diverged so significantly, they said.
The council has resolved «overwhelmingly» to support TAF’s introduction, saying it will «stand alongside» Fonterra’s board of directors on June 25.
Rowarth said Couper had set a standard and held to it, and Leferink described him as a man of honour.
«It speaks volumes that he stuck to his guns under what is an intense pressure-cooker environment,» Leferink said. «The lobbying is, frankly, unbelievable from all sides.»
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The size of the fund would have to drop «quite a bit» from 25 per cent before Leferink would personally be comfortable with it, he said.
«Federated Farmers is encouraging debate so we don’t take a position on this, because we have members on both sides of the debate. But we think there should be a decent reduction.»
Rowarth said farmers were hotly debating what the proportion of farmer shares to public investment units should be.
Fonterra chairman Sir Henry van der Heyden said Fonterra’s board regretted Couper’s decision to stand down.
«But if Simon is uncomfortable, he has done the right thing by the co-operative. The board is grateful to Simon for his eight years of service to Fonterra.»
Fonterra’s board encouraged all shareholders to exercise their vote and to have their say on TAF on June 25 at a special meeting, he said.
– © Fairfax NZ News
http://www.stuff.co.nz/business/farming/6991390/Fonterra-share-plan-a-step-too-far-for-Couper