Sharemilkers and GlobalCo SharesThursday, Mar 15, 2001
Sharemilkers, such a significant part of the dairy industry, feel challenged by the lack of inclusion
in the development of the terms for GlobalCo's shareholding and structure.
It seems that sharemilkers are not confident of their skill in re-negotiating a satisfactory contract
with their farm owner and are seeking an authoritive position from Globalco to ensure that the status
quo in terms of relative returns is maintained.
Although the details of GlobalCo's shareholding and the mechanism and basis for distribution of the
mega cooperatives surplus have not yet been settled the sharemilkers section are demanding action
in a vacuum.
The sharemilker's politicians seem to be wavering between the real need for the maintenance of equitable
income under their contracts and the wish to be influencers of the direction of the company ahead
of the current industry shareholders.
The equity of distribution of the income under each contract is a practical issue that at worst requires
some legislation to ensure that existing sharemilking contracts continue their term by matching
the new distributions to the old formulas for payout.
Re-bundling the unbundled payout would give a continuation of the terms agreed at the commencement of
the sharemilkers contract. Such a requirement would only be required for the balance of the contracted
term and all new contracts would be negotiated with full knowledge and nature of the unbundled
However the unsaid component of the sharemilkers demands for voting influence in the cooperative introduces
a significant shift in the nature of a cooperatives responsibility to its shareholders. It
is a short step from one grouping obtaining a position, to all the other so-called industry stakeholders
seeking the same influence.
If sharemilkers should be required to take shares, why not farm managers or farm employees or company
executives or production managers or tanker drivers? Each of these groups could stake an equal claim
to being an important and key part of the dairy industry and overlook the fact that their current
employment contract represents their accepted agreement terms for employment in the industry.
The reason there are sharemilkers is because it has been a superb system that has benefited both the
sharemilker and the shareowner. Take away the hierarchy that has served the industry well where the
sharemilker contracts with the owner and the owner contracts with the cooperative and the cooperative
contracts with the market and you develop a 'tower of Babel".
A multitude of voices shouting their differing demands may satisfy the observers of organizational conflict
but it will play hell with operational efficiency and will have that same biblical outcome.