On June 25, the 10,500 farmers who jointly own dairy giant Fonterra voted to allow outsider investment in the company for the first time. These external investments will be directed towards a US$400m fund.
Investors will get dividends but no ownership stake in what is being called the Trading Among Farmer’s (TAF) Scheme, which Fonterra management has described as a step to better secure its finances.
Though the dairy giant has been given the go-ahead to implement the controversial scheme, with around 66% of farmers voting in favour of it, the move is still being opposed by a significant section of the farmers.
Sections still against it
In a spate of interviews with local media in New Zealand, a section of farmers led by Lachlan McKenzie, has made clear it remains against the idea and that legal action is more than just a possibility.
“It's certainly morally wrong, whether it is legally correct or not, I'm not a lawyer,” said McKenzie.
However, Sir Henry Van Der Heyden, chairman of Fonterra, said that opinion among farmers about the TAF scheme is changing and that a majority now support it.
Approval not given for constitutional amendments
Clouded over by the euphoria over the approval for the scheme was that while 66.45% gave the green light to the TAF scheme, it needs 75% approval to ensure a second resolution and thus constitutional changes.
Van der Heyden told local media that Fonterra would give the second resolution a look later this year.
“What we've voted on in 2010 is wider limits around dry shares and in the shareholders fund, so we've got a mandate that we can actually proceed. What we are going to do, is take that resolution back to our farmers at the annual meeting at the end of 2012,” he said.
The next annual meeting for Fonterra farmers will be held in November.