The chair of the Shareholders' Council, representing Fonterra's 10,500 farmer owners, has resigned saying he's uncomfortable about some aspects of the Trading Among Farmers proposal.
Simon Couper says his concern relates to the shareholders fund, which would allow outside investors to buy the dividend rights to shares deposited by farmers.
Despite Fonterra's assurances that total farmer ownership and control of the dairy co-operative won't be compromised, some farmers, including Mr Couper, are still worried that the fund could undermine that control.
He said his major concern is that if the fund gets too large the influence of outside investors may take ownership away from supplier-producers who have built up the organisation.
Mr Couper says the Fonterra board's proposal to put tighter controls on the size of the fund goes some way to meeting his concerns, but not enough.
He would like to see the size of the fund capped at about 15% of the co-operative's share value, but figures he's seen indicate that Fonterra will propose a higher limit.
Fonterra chairman Sir Henry van der Heyden says the co-operative regrets Mr Couper's decision to stand down.
The Shareholders Council under its new chair, former deputy chairman Ian Brown, has been quick to assure Fonterra that it overwhelmingly supports the introduction of Trading Among Farmers.
Mr Brown said the council has been focussed for the past months, and throughout the due diligence procedure, on ensuring that the scheme would not threaten farmer-shareholder ownership and control or the integrity of the milk price.
The farmer owners will get to see the detail of what Fonterra is proposing in information packs to be sent out in the next week, before voting on the final form of the TAF plan on 25 June.
Meanwhile, Simon Couper's resignation leaves a vacancy on the Shareholders Council, where he's been the southern Northland representative since 2004.