A Fonterra farmer says the company's bonus issue of shares on Wednesday show the tail is now wagging the dog.
Lindsay Blake, an accountant and dairy farmer in Tirau, says the move by Fonterra this week to issue more shares is a desperate attempt to try and stop the co-op haemorrhaging milk supply.
With the current share price and milk price, she said it makes no sense for farmers to grow their milk supply.
Ms Blake said it's alarming just how soon after Trading Amongst Farmers was introduced that those measures are being taken.
She said there's evidence Fonterra is already losing milk supply in Canterbury and she believes it's gone from 89% of milk supply there to somewhere in the vicinity of 29%.
Ms Blake said it's reactionary governance rather than cooperative governance.
She said Fonterra issuing extra shares is akin to the United States printing extra money - which left it on the fiscal cliff.
Comment
However, Fonterra chairman John Wilson said most farmers are happy with the share price and the new measures will give farmers more flexibility.
He said Fonterra's more mature farmers are comfortable with where the market is valuing their shares at the moment.
"Those farmers are also wanting to ensure we give flexibility for our younger growing farmers, that's the very nature of what we are as a cooperative," he said.
