He also wants fellow shareholders to think harder about how much Fonterra reflects their own values and goals.
“Really, concerns over dividend, milk price models and payments, these are secondary.
“Where Fonterra needs to be heading goes far deeper and demands all shareholders take a good, hard look at who they are, what they have become and how much their co-operative reflects that,” Cookson, who runs five family cattle and goat farms, says.
Any reset demands a cleansing of what he describes as a toxic culture at board level between farmer directors, something he believes is well under way under chairman John Monaghan.
“And the best way he can go forward is by saying ‘this is on me’. He can be humble about the mistakes that have been made, apologise for how things have become what they are and go from there.”
Cookson maintains most shareholders knew in their hearts the co-operative was going to get to this point and all, including himself, have to accept some responsibility for that happening rather than making it an us-and-them issue between farmers and management.
“As a group we accepted performance was everything. That was our key KPI. So you cannot blame Theo Spierings for his bonuses. He was paid based on that KPI, that was what we valued.”
That has left the co-operative bankrupt of social values that now need to be stocked up.
“This will be hard for farmers to hear, that Fonterra reflects back on what we as farmers became.
“There has been a level of arrogance there in dairying as an industry.”
He hopes any strategy revamp goes beyond dollars and cents and acknowledges the need for deeper co-operative values to be restored, where shareholders look out for one another and get to feel more integrated with their co-operative.
“To have a better co-operative we need to stand up for values that I think have fallen away throughout our rural communities over the years when it comes to relationships and caring about each other.”
Grant McCallum.
Grant McCallum
Maungaturoto, Northland
580 cows
The main objective of Fonterra’s new strategy must be to restore confidence and respect in the co-operative, within farmers and the wider community.
“The industry has been hammered over the past 18 months or so.”
It must also extract as much value as possible from New Zealand’s grass-fed milk production.
That will not necessarily be fast-moving consumer goods because there are many other ways of getting value from milk and the rest of the country doesn’t appreciate that.
Farmers rely on their directors to be guardians of the co-operative and those directors have more restricted ways of raising capital than corporates.
“Co-ops have different risk profiles and they must remember that.”
Farmers don’t want to know the details of strategy but that their representatives can develop the right one and employ the right people to implement it.
The milk price model needs to deliver the highest credible payout possible and the dividend is almost a conundrum, McCallum said.
Fonterra’s competitors would like the milk price to be lower but that is not in the interests of NZ dairy farmers.
