Fonterra still has a fight on its hands - TAF opponent

Monday's slick Fonterra show in Hamilton was hard for the impartial observer to unravel.

Behind the huge video screens and beyond the dozens of black-coated and branded ("Dairy For Life") minions who wandered the aisles, voting boxes in hand, there seemed to be the hint of opposition and the smell of revolt. 

The board characterised the two-to-one vote for the controversial Trading Against Farmers (TAF) scheme as a "strong mandate".

However, the company's PR spin of unity was let down by the failure of three-quarters of farmers to endorse proposed changes to the constitution - which apparently would have entrenched farmer power in the cooperative and restricted the size of the proposed unit fund to be accessed by outside investors.

Unlike the order displayed in the rows of vehicles at the Claudelands Events Centre - with its high proportion of four-wheel drives and personalised number plates - an observer left Fonterra's special meeting with a picture murkier than an effluent tank.

At the meeting, it was drilled into farmers that TAF would allow Fonterra to control its destiny. Again and again, Fonterra directors said even if the shareholders didn't support TAF, it was important the constitutional changes went through. Yet the voters had enough pause to disagree.

Fonterra chair Sir Henry van der Heyden said late in the afternoon he would be surprised if farmers voted against the constitutional changes when the same resolution was put to the annual meeting in November.

But he has a fight on his hands.

TAF not needed: opponent

Canterbury farmer Leonie Guiney, an ardent TAF opponent who owns four dairy farms with husband Kieran, says November's vote is not a done deal.

"It's not, in my opinion, a fait accompli that the same resolution will pass." 

The mother-of-four and former farm business consultant, who farms 3000 cows in the shadow of Mount Dobson, near Fairlie, maintains there's no reason for outside investors to boost Fonterra's balance sheet. 

She says through retentions, farmers have significantly bolstered Fonterra's balance sheet since 2007 and the company - New Zealand's biggest and the world's biggest dairy exporter - has emerged stronger after one of the world's worst credit crunches.

Mrs Guiney asks: "Is Fonterra really capital constrained?"