Article: Kiwi farmers sharing in the risks

Article from:
Waikato Times
Article date:
October 8, 2009
Author:
Copyright

Farmers who buy extra shares in Fonterra will be caught between a rock and a hard place, according to a leading Waikato academic.

Stuart Locke, Associate Professor at Waikato Management School, said farmers who voted to change Fonterra's capital structure to allow an extra 20 per cent shareholding and didn't buy extra shares could lose out to their fellow farmers while those who bought extra shares would suffer from having put all their eggs in one basket.

"If you are a farmer buying additional shares in Fonterra, Fonterra is not a good risk diversification."

Locke, who suggested earlier in the season that most farmers didn't know how badly off they were with a $4.55 per kg of milksolids ...

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