Survey Results Strong Signal To Fonterra
22 May 2006
Survey Results Strong Signal To
Fonterra
Sharemilkers want the ability to buy shares in Fonterra Co-operative Group, according to a survey by Federated Farmers of New Zealand (Inc).
The poll of 338 dairy members of Federated Farmers found that 96 percent of sharemilker respondents wanted the option to buy Fonterra shares, and 64 percent of sharemilker employers agreed.
The survey adds to pressure on Fonterra to enact Part 2, Section 160, of the Dairy Industry Restructuring Act 2001, which allows herd-owning sharemilkers the facility to purchase Fonterra fair value shares. Currently, only farm owners can buy shares in the co-operative.
“Fonterra has had the legal ability to sell shares to sharemilkers for the past five years. But it hasn’t done so,” said Dean Bailey, chair of the sharemilkers’ section of Federated Farmers of New Zealand.
“The ability to buy shares is a natural progression for most sharemilkers so we want Fonterra to give this urgent attention.
“The change will also provide the opportunity for farm owners to release capital through selling shares without taking the farm out of dairying, which is happening at the moment.
“Sharemilkers have always been the innovators in the industry and this would give them another tool to drive productivity.
“Federated Farmers has been working with Fonterra to progress this issue, and will continue to do so until there is a satisfactory outcome for sharemilkers, sharemilker employers, and Fonterra,” Mr Bailey said.
Sharemilker employers support sharemilkers owning shares, when both parties agree to the ownership of shares by the sharemilker.
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Sharemilker Shareholding and Representation on Fonterra Shareholders Council
Following are the results from a Federated Farmers survey of Dairy Farmers of New Zealand members and sharemilkers’ section members.
Total number of DFNZ respondents: 203, of which
147 employed sharemilkers and went on to complete the full
survey.
99% of DFNZ respondents who employed sharemilkers
were Fonterra suppliers.
Total number of sharemilker section respondents: 135, of which 121 were 50:50 sharemilkers and went on to complete the full survey.
The general comments section incorporates comments from all respondents.
Do you consider that herd-owning sharemilkers
should have the option to purchase Fonterra
shares?
YES NO
Sharemilker employers 66 % 33
%
Sharemilkers 96 % 4 %
Do you consider that
herd-owning sharemilkers should be able to stand for
election to the Fonterra Shareholders
Council?
YES NO
Sharemilker employers 64 % 36
%
Sharemilkers 95 % 5 %
SHAREMILKER EMPLOYERS
If it
were possible to transfer Fonterra shares to a herd-owning
sharemilker who is engaged on your farm would you do
this:
As soon as possible 8%
May in the future
58%
Never 34%
SHAREMILKERS
Would you be
interested in purchasing Fonterra Shares if they were
available? YES NO
87% 13%
SHAREMILKERS
Would
purchase of Fonterra shares be a viable option for you in
the next three seasons if
available? YES NO
84% 16%
SHAREMILKER EMPLOYERS
Do
you consider that the current lack of options for
sharemilkers to purchase Fonterra shares:
Limits your
farm production 1%
Has the potential to limit your farm
production 26%
Has no effect on your farm
production 73%
SHAREMILKERS
Do you consider that the
current lack of options for sharemilkers to purchase
Fonterra shares:
Limits my production 1%
Has the
potential to limit my production 46%
Has no effect on my
production 53%
Do you consider that ownership of Fonterra
shares should be included in the sharemilking agreement as
an option?
YES NO
Sharemilker
employers 83% 17%
Sharemilkers 58% 42%
ENDS