Farmers and share-milkers who run their own herds on the farmers' properties operate under a variety of contracts to divide the income from the milk they produce and the shares that farmers hold in Fonterra.
Those agreements have become more complicated, because farmers are now allowed to buy extra shares beyond what they need to match their milk supply, and from next year, they'll be able to trade shares among themselves, and make the income from them available to outside investors through a special fund.
Federated Farmers' sharemilker chair, Cieran Tully, says that creates the potential for some conflict in agreements between farmers and sharemilkers, for example if the farm owner is paying the milk price in a dividend and is selling shares through the year.
Bay of Plenty dairy farmer Scotty McLeod, who represents farmer employers in Federated Farmers, says farm owners and sharemilkers have different options for reaching agreements that are fair to both, so neither is disadvantaged by changes in milk production or shareholding.
Federated Farmers has organised a series of meetings, starting on Tuesday, to advise dairy farm owners and their sharemilkers how to avoid those problems.
