Payout Increase Highlights Risk Of Restructure

Published: Thu 13 Dec 2007 01:55 PM
Payout Increase Highlights Risk Of Fonterra Restructure
Today’s announcement by Fonterra of a 50 cent increase in this season’s forecast payout to dairy farmers is great news, but highlights what farmers risk losing if they accept the company’s preferred capital restructure option, says the party’s primary production spokesperson Doug Woolerton.
“The increase in the payout to $6.90 per kg of milk solids is excellent news for farmers and excellent news for the New Zealand economy as a whole,” said Mr Woolerton.
“While good news, the increased payout reinforces New Zealand First’s view that the proposed option for Fonterra’s capital restructure would be a disaster for farmers.
“Farmers currently receive any profits through the milk price. This will no longer be the case under the proposed restructured company, as profits will be extracted from the milk price to allow a return to be passed on to non-farmer investors. This extraction will also likely increase as farmer shareholding decreases over time.
“As a result, farmers, who were once masters of their own destiny and who were rewarded for their blood, sweat and toil will end up beholden to non-farmer investors in the new profit- driven company.
“The decision ultimately rests with farmers, and I urge them to act in both their and the country’s interest and reject the restructure proposal,” said Mr Woolerton.

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