Media Release
23 March 2006
Dairy Farmers Urged to Think Twice
New Zealand First is urging dairy farmers to exercise extreme caution before cashing up their farm equity in schemes
such as that concocted by Dairy Investment Fund Limited (DIFL).
The offer from DIFL would allow dairy farmers to raise cash on their Fonterra shares. While farmers retain ownership and
voting rights of the shares, DIFL receives the value-added component of Fonterra’s payout.
“The opportunity to unlock money tied up in Fonterra shares might sound good in theory, but I feel compelled to warn
farmers that if something sounds too good to be true, it usually is,” said Primary Production spokesperson Doug
Woolerton.
“The deal is similar to home equity mortgage schemes where owners can borrow against the value of their home without
having to make repayments in their lifetime, or until they sell the property. The attraction of cash in the hand now can
sometimes lead to later disappointment as equity disappears.
“I have grave concerns that farmers who trade their shares for cash will end up in a similar situation, with their farms
being owned by a faceless and merciless investment company.
“There is also the disturbing possibility of black market share trading.
“For these reasons, I advise farmers to think very carefully before availing themselves of this offer,” said Mr
Woolerton.
ENDS