Fonterra, New Zealand's most successful international trader, our only truly multi-national enterprise, a world leader in dairy exports, has been trying for years to become more like a normal company. It will try again today when many thousands of its farmer-owners meet to vote on a share trading scheme to give the company a more stable capital base.
On the face of it, there can be no argument that the "trading among farmers" (TAF) scheme is necessary to secure the company's capital against sudden heavy payouts to farmers who want to redeem their shares, as happened after the 2008 drought and global financial crisis when farmers pulled $600 million out of the company.
Nor, on the face of it, does the TAF appear to threaten to dilute farmer ownership of the co-operative since the stock that non-farmers might hold are derivatives without voting rights. But many farmers have not been convinced on this score.
The finer points of the scheme look fiendishly complicated. Two markets will be set up, one for trading of shares between farmers, the latter a fund that will receive dividends but not ownership rights of shares sold into it. The fund will be listed on the stock exchange and units can be bought by the investing public.
Farmers might reasonably wonder why they need to provide the fund since the TAF appears to remove Fonterra's redemption risk. But the secondary market would seem to be in their interest because it would offer them an alternative when their share price drops, as it would in hard times with more of them wanting to sell.