Organic Dairy Hub Co-Op Ltd Structure

Development

After the Fonterra announcement in August 2011 OrganicAg organised meetings open to all organic farmers in the affected regions.
Options were explored and considered. Material circulated to organic dairy farmers.
June 2012 an Organic Sector Forum was held in Taupo.
During the balance of that season further Hub meetings and development took place.
The Hub had a home for all milk off or coming off contract May 31st 2013.
Fonterra offered some of those farmers a contract in late April 2013.
Balance of farmers in southern regions offered in March 2014.
Hub not needed.>>>Development of relationship building continued.
Northland milk coming off contract with no offer created need--Hub reactivated spring 2014
Home found for all milk Oct/Nov 2014.
Fonterra offer Northland supply contracts Dec. 2014--with an ‘all or nothing’ clause.
The hub grow out of need not want—the base ideas were developed by consultation with farmers.
The Hub did meet the expectation of farmers bankers and accountants in 2013.
In 2011 Fonterra had 127 organic farms---2014 it has 74 ---2015 ?????
Fonterra have not as yet confirmed byway of offer the future beyond May 31 2015—4 months.
To date the Hub has been funded by OrganicAg with voluntary contributions from some farmers --- these to be set off against future shares/establishment fees.

To operate as a Co-operative.
The brokerage of dairy farm out-put. Milk sold on forward contract.
To sub-contract rather than have direct responsibility.
The management of returns/quality/etc.
To facilitate joint ventures between Hub/processors/marketers and others.
To facilitate capital investment opportunities for individual farms & processors.
The management of growth in organic dairy.
Not to generally be involved in capital plant.

To have an elected board (4 farmer, 2 independent), chair to be independent.
Board for policy and governance.
Staff (sub-contracted) for delivery.
Two tier voting system; unit of milk (1 per kg/ms) and farm entity (10 shares per entity)
Both votes required to effect change.
Votes can be split (cast some for and some against)
Constitutional change 75% of both.
General issue 66% of both.
Vote validation; general 66%,constitutional 75% of eligible vote needs to be cast.

Milk payment; direct credit second to last business day month following supply. (90%??)
Monthly with Oct., Dec, March top up, June wash-up.
Paid in kg / Ms.
Equity between suppliers.
Statements to have industry standard look.
A net $4+- cash-in on Fonterra shares.
Cash flow advantages of payment system.