Farmer ownership of assets on the line
Of 8,000 shareholders in 2004, only 5,000 were aware they were actual shareholders - or at least the larger ones. What is at stake is the farmers’ ownership of a considerable portion of the tangible co-op assets. Not valued since 1996, when €200m was cited as their value, today a figure of €2,000m would be more realistic.
The superstores and retail outlets have been upgraded and I believe the €40m spent on each of the new spreads and whey plants indicates increasing asset values ever before the property boom.
Excluding facilities required for milk, grain and agri-trading, properties to the value of €1,000m must be in the possession of this totally farmer-owned co-op or, in simple terms, assets not needed in mainstream activities to the tune of €200,000 on average for every one of the above-mentioned 5,000 shareholders.
Dairy farmers in the under 60,000-gallon category made up nearly 80% of all milk suppliers in ‘02 - all 3,000 of them, with an average output of 34,000 gallons, a scale of enterprise likely to yield no more than €20,000 for a year’s work.
The cashing in of non-core assets should provide many of these farmers with the capital to expand their enterprises, or to quit with dignity.
Under current proposals, many of them will slip from A1 category shareholders to the disenfranchised type with no say in future developments.
The co-op proposals, I believe, will lead to assets being saturated by bank borrowings, drawings to pay staff and, sooner rather than later, dividends to shareholders after floatation.
Denis F Buttimer
Gurranreigh
Lissarda
Co Cork
