3 December 2012

Fonterra sales locking out farmers

The high price of Fonterra shares is forcing farmers away from the cooperative model and is instead increasing foreign profits, the Green Party said today.

They were responding to the Fonterra Shareholders Fund unit price spiking after being listed on the NZX on Friday.

“I have had reports from farmers who can’t afford to buy farmer shares in the cooperative because the price is being driven up by traders of shares on the stock exchange. These farmers will instead have to supply independent companies, which leads to splintering of the dairy industry,” said Green Party agriculture spokesperson Steffan Browning.

“Stock exchange speculation that influences the price for trading among farmers (TAF) plays into the hands of overseas interests and the Ruth Richardson and Chinese interests in private dairy companies such as Synlait,” said Mr Browning.

“Fonterra is not just an asset up for sale to the highest bidder; it is a key strategic asset for the dairy farmers of New Zealand.

“The Chief Executive of the NZX is right when he says that the weight of investment money can push share prices and distort the fundamentals of companies like Fonterra.

“We predicted that opening up Fonterra would break apart its strength of bringing together New Zealand producers, and immediately that has happened.

“Lessons from the division of ENZA and the pip fruit sector, and the meat sector should have been enough.

“New Zealand farmers should be encouraged into strong cooperative models to protect intergenerational benefits; speculative outside investor interests must be curbed,” said Mr Browning.

ends

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