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Dairy Farmer Mega Co-op Survey Encouraging

Dairy farmers are strongly behind the Mega Co-op, according to a survey carried out by Dairy Farmers of New Zealand. Commenting today on the results, Chairman Charlie Pedersen said that respondents had indicated a clear preference for the Mega Co-op.

The DFNZ national survey indicated that 74% of dairy farmers support a commercially viable Mega Co-op, with at least 90% of the industry, as their most preferred option.

"This result should not be taken as an indication, however, that the 75% farmer approval for the Mega Co-op required by the Dairy Industry Restructuring Act is a mere formality," warned Mr Pedersen.

"Dairy industry leaders still have a long way to go in winning farmers' approval of the merger's detail. But the leaders can take heart that New Zealand dairy farmers want change, and that the Mega Co-op is their preferred option." Mr Pedersen added that only nine percent supported the status quo as their preferred option.

"Interestingly, the much-touted 'two company' alternative to the Mega Co-op did not find a lot of farmer support. The option of two vertically integrated companies competing in their international marketing activity gained only 10% of first or second preferences, and was the last or next to last preference of over half the respondents."

"Even the alternative of having two competing, vertically integrated manufacturing companies, marketing internationally together through a joint venture, failed to gain any significant support."

Industry leaders' proposals for the Mega Co-op's governance appear to be gaining support. "The survey showed that farmers want to elect a commercial board from amongst their own number, and to co-opt directors with specialist expertise."

"They want a council of shareholders to provide clear direction to directors on issues such as strategic direction, budgets and performance. Above all, they want directors to be accountable and will rely on the council of shareholders to ensure just that," said Mr Pedersen.

The full survey results are on the Federated Farmers website: www.fedfarm.org.nz

ENDS

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