Fortunately New Zealand cockies are not so dumb. They just voted in favour of the scheme called TAF.
Shareholders had until yesterday to vote over the controversial Trading Among Farmers proposal, which would see dairy farmers able to buy and sell co-op shares among themselves, rather than through Fonterra, as they must at present.
The so-called expert doesn't provide any evidence as to the method by which suppliers to Fonterra might trade shares BETWEEN THEMSELVES will result in overseas ownership of shares. Nor does he provide any serious evidence as to why that might be a bad thing. Perhaps he's a card carrying member of Winston First.
You'd think it's the end of the world if a bit of profit is remitted overseas.
Does anyone pause just long enough to ask:
"Why does the profit go overseas?"
If they did, they might find out some poor bastard overseas delivered something of value in return for his measly little bit of profit. And in return for Fonterra's use of his capital, he receives a dividend - NOT profit.
Profit is retained by the business to fund capital expansion.
He delivered his capital. Capital which the dumbarse New Zealanders happen not to have available.
Dairy farmer Jones has a ten million dollar enterprise in which he holds $1.0m worth of Fonterra shares. He owes $2.0m to ANZ and is paying 8.0% interest.He sells $500k worth of shares to Ishtak Goldstein of New York and pays down $500k worth of his ANA loan, saving interest of $40k which otherwise would have gone to an overseas owned bank. Our mate Ishtak gets annual dividends of say 4.5% from Fonterra which amounts to $22.5k.As a result, retained in the hands a NZ farmer is a net $17.5k of profit which, without the sale of shares, would have been remitted overseas.What is it that the dumbarse from Federated Farmers doesn’t understand?
(Phew!!!!!! That's a change from American politics but not as entertaining.)