“In my view, with our scale and capability we should set the benchmark for milk in New Zealand.”
That price should leave competitors struggling to keep up, he said.
It wasn’t that setting a high benchmark was simply good for Fonterra’s farmer shareholders, it was also good for NZ as a whole.
“For NZ milk to be seen as a premium product and be valued as such is good for NZ and NZ’s GDP. It’s good for our rural communities as well because it’s the milk price that flows into our rural communities and keeps them strong.
“It’s important that Fonterra continues to set that benchmark because in my mind our future prosperity depends on it.”
Van der Poel was farewelled at Fonterra’s annual meeting in Palmerston North in November, retiring from the board after 12 years.
Although he wasn’t a founding director, the Waikato farmer joined the board a year after Fonterra’s formation and had very much been part of the discussions that lead to the mega-merger having served as a director of NZ Dairy Group since 1999.
Van der Poel said there had been two critical times that stood out over the past 12 years.
The first was during the early years as the co-op sought to bring merger partners together into one entity.
“We had great aspirations as to what it (Fonterra) would be. But all of us underestimated the amount of work that would be involved.”
Bringing strong legacy groups together, particularly when there had been, at times, very robust competition between the two major co-operatives, had taken longer than first anticipated.
“When there had been that level of tension and then all of a sudden you bring those people together and from a board and management point of view, expect them all to work hand in hand – well that process just took time,” he said.
People had worked hard to push through that and it was gratifying to see what the company had become in terms of its unity.
His second stand-out event had been the introduction of trading among farmers (TAF).
“It’s performed as well as we expected it to, it’s done what we expected and that’s the reassuring thing because it was breaking new ground, it was untested ground.
“That’s one of the things we have done well as a co-op as we’ve gone forward, we’ve continued to evolve, we’ve been prepared to challenge new ground.”
TAF had taken endless hours of work and commitment from people throughout the co-operative, at a governance, management, staff, Fonterra Shareholders’ Council and farmer level.
The road to the final outcome wasn’t a smooth one but van der Poel played a big role in formulating, modifying and debating the many moving parts in the revised capital structure proposal which eventually become TAF.
‘I don’t think we always have to agree on things but we have to be able to challenge and debate and make decisions and move on.’
The length of time taken to get it right wasn’t seen as a weakness by van der Poel but a strength in that it reflected the level of debate and engagement shareholders had with the co-op.
“The level of engagement as we went through the TAF process was an indication of the strength of commitment from our farmer shareholders. You have to have strong engagement to be a strong co-op and long may that continue.
“I don’t think we always have to agree on things but we have to be able to challenge and debate and make decisions and move on.”
That didn’t mean TAF as it stood was the final solution for Fonterra.
“One message from me on TAF is that it will and should evolve.”
But he said it was important that in bringing about that evolutionary process everyone was very clear about what outcomes the co-op was looking for.
Fonterra needed to continue to invest both in NZ and globally, he said.
It had an obligation to capture value out of the global market on behalf of its shareholders.
“That’s the reason why we formed Fonterra. It has an absolute obligation to do that but in my mind that investment should never put our farmers’ homes and businesses at risk. Whatever happens to the evolution of Fonterra the assets that collect, process and sell our farmers’ milk should always be an extension of our farming businesses – that’s where we talk a lot about ownership and control.”
He had seen first hand in other countries what happened when farmers lost control.
“The price they pay is huge from both a value and influence point of view.”
If ownership and control was lost it was extremely difficult to ever get back.
He made a point of stating his support for Fonterra’s governance model, emphasising the importance of the role the Fonterra Shareholders’ Council had to play as a custodian of the co-operative principals and in connecting Fonterra with its farmers and communities.
“My challenge for the council is make sure you always have the confidence to perform those roles to full capacity.”
While Fonterra had already come a long way he believed its best years were yet to come and he took comfort from the fact he was leaving his governance role with the co-op in good hands.
“I will miss the people in this business. It’s the people who make up this business and we as farmers have a very capable bunch of people lead by Theo (Spierings). As shareholders we’re well served.”
Fonterra chairman John Wilson said Fonterra had been well served by van der Poel. He’d led and worked on numerous committees over the years and his strong knowledge and affinity to dairy farming businesses made him an especially valuable contributor to milk pricing initiatives, such as the capacity adjustment charges and the complex and challenging development of the farmgate milk price.
He’d also taken a lead role in Fonterra’s international dairy farming strategy.
Wilson said van der Poel’s concern for the detail and his conscientious pursuit of the “what if” made him a strong contributor to all the board’s deliberations.
“No matter what was happening in the co-operative or what he had on his plate personally he was always ready to step up and put his shoulder to our wheel to help our co-operative.”
He played a statesman-like role for the co-op often as an ambassador for Fonterra both in New Zealand and globally.
Both van der Poel and Wilson paid tribute to Sue van der Poel for her contribution to the co-op and industry and the support she gave to her husband.
