A strong Co-op benefits farmers and New Zealand
It’s good to remember why we’re a Co-op in the first place. First and foremost, the role of a
cost, and over the long run they are incentivised to reduce the price they pay for milk to maximise corporate profits. Having a strong farmer-owned co-operative in our dairy industry is important to every New Zealand dairy farmer, and for the country as a whole. Specific legislation enabled Fonterra to be formed so that an efficient co-operative of scale could lead New Zealand into global markets. Working together as a Co-op means we are connected to local communities around New Zealand. It enables our efficiency – from behind the farm gate through to our manufacturing operations and beyond – and supports innovation. The value we create is then returned to regional New Zealand, where it plays a strong role helping to sustain local communities and enhance their wellbeing.
For every dollar we earn as farmers, we spend almost 50 cents in our communities. 2020/21 looks set to be another season that our Co-op contributes more than $11 billion into the New Zealand economy through milk price payments. Our milk price sets a benchmark in New Zealand, so even those who don’t supply the Co-op benefit from it. Fonterra and Tatua are the two main dairy co-operatives left here. Many other milk processing companies are, or have become, fully or substantially owned by offshore interests. It’s critical to protect and build on what we’ve got – for the benefit of all Fonterra shareholders. Ultimately, a strong and sustainable Fonterra leads to a stronger and more sustainable Aotearoa New Zealand.
co-operative is to give farmers control of their own destiny. Because we own and control Fonterra, we know that our Co-op will collect our milk and work hard to ensure we receive the best possible price for it. Maximising overall wealth of our shareholders is at the core of our Co-op’s purpose. Sharing the investment in our value chain between us farmers and having confidence that our milk is going to be picked up means we can have the certainty to invest in our individual farming businesses. This is an important reason behind the efficiency and productivity that has given us some of the advantages we enjoy today – advantages that benefit all Fonterra shareholders. We believe that farmers are worse off in countries where there is no strong co-operative. Corporate processors look at milk as an input
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