FONTERRA FARMERS VOTE TO BE PARTIALLY GLOBALLY OWNED IN FUNDING FOREIGN FARMING PRODUCTIONS

[Fonterra votes to be partially globally owned].

In the biggest news story so far this year in New Zealand, concerning farming real estate, the building block of the New Zealand economy, and the biggest cash cow in our history, (dairy farming) Nadine Chalmers Ross was assigned the night shift in over-time to cover the story.

Fonterra farm co-op, made up of 10,500 farmers were proposed a scheme where they could trade shares amongst each other, and also sell to foreign (or external investors) up to 20% of the co-op. Or, to give consent to a trading scheme – where the biggest land mass of useable productive farming land in NZ, went partially on the block as collatoral.

Under strictly private filming conditions, Chalmers Ross explains how a 75% result of voters being ‘in favor of’ would have been the result needed to ensure the co-op’s shareholders would create the stable and unified environment of shareholders, showing trust in Fonterra’s managements future development plans with the $500million plus money, raised from the vote and partial sale of the trading shares plan.

The reporting was worded this way: “Farmers continue to worry that letting outsiders invest in their co-operative will ultimately lead to a loss of control. Among comments from farmers voting against the scheme today were that it takes Fonterra too far away from tried and proven co-operative principles, it is not needed and that it has not been well enough tested.

They also say 50% is not enough and that 75% shareholder support should be required to see it pass. “Anything less than that will actually create a rift in the shareholder base,” said Allister McCahon, a Dargaville farmer.”

Well 2/3rds or just over 60% of farmers agreed. Well below the 75%, the spin doctors of Fonterra, claim it’s enough and they’re romping off with 20% of farmers capitol to invest in arable farming land in new territories abroad.

The benefits: Agricultural knowledge, the scinence of the technology and expertise can now be exported to feed far reaching markets with farming ventures on foreign land. This reduces freight expenses and allows for business networking to develop for the NZ co-op in foreign territories, if the scheme goes well. I hope it does.

The risks: Those dumb balance sheets at AGM’s (in a drastic scenario, such as witnessed in an AIG styled Wall Street banking tale) that declare, ‘oh we made a loss of $200 million over there and $100 million over there.’ Followed by ‘oops, we hope to make it up to you next year,’ so your farming co-op can remain 80% yours. They do happen.

How to reduce this: A more risk-managed culture of shadow managers (of NZ citizenship and preferably children of NZ farmers, Maori farmers children even, for a change!), working with the top execs in each global territory is now needed.

What it says: Both existing capital and projected profit earnings, were drawn down on in this business gamble of measured risk in light of food needs increasing in the world. It allows for 1 in 5, virtual ’Wall Street farmers’ to now own the co-op. They’re soon to be in the mix. Then it becomes a shark chomping game of shares now. Today, farming culture changed. This is perhaps, something that the farming industry is not au fait with, as collective community objectives have made the dairy industry pony up and work together to be the world’s no.1 dairy supplier. It introduces a new element, of comptetiveness now. Naive farmers need to choose who they trust more wisely from here on in. Now the external components of investors, can put pressure on the farmers in the future.

Management: The good - Ralph Norris (who is used to getting paid $20 million a year) is on the board. He’s doing white milk and black milk (dairy and oil portfoilio mix, this year). He sits in the middle of ‘liquid economies NZ’ where soil quality while furthering both dairy’s growth and export product, as well as energy development (that includes oil, mining energy products) must co-exist side-by-side in his two portfolios. Ralph is a good manager. The Co-Op should be able to expect a lot from him. Hopefully Norris and his buds will recoop the investment in strategic ways. (more…)

June 25, 2012 | Categories: Apps, Asia Pacific, Asia-Pacific, Bankers, Banking System Flows, Brazil, Business Networking - New Zealand, Business Watch, Butter, Children, Chile, China, Cross-Cultural Narratives, Dairy Products, Dargaville, Economy, Engineers, Entrepreneurs, Eurozone, Far East Movement, Farming, Fast Foods, Fonterra, Food, Food Production - New Zealand Exports, Foreign Affairs, Freight, India, Medical Science, Medical Tourism, Medicinal, Mexico, Nadine Chalmers-Ross, Netherlands, New Zealand, New Zealand Citizens, Peter Thiel, Pharmaceutical Companies, Pharmaceutical Packaging, Ralph Norris, Science, Science & Innovation, Science Teachers, Science-Fantasy, Theo Spierings, Trade, Trade & Commerce, Trade Agreements, Water, Wool, World Peace | Leave A Comment »