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HAMILTON - Dairy industry leaders have agreed to sharemilkers getting shares in the proposed mega-merger and a say in the industry's future.
The dairy industry's establishment board has approved the recommendation from a working party.
The recommendation would see sharemilkers negotiating with farm owners for a share of the dividends from the
company.
Even if the mega-merger does not go ahead, New Zealand Dairy Group chairman Henry Van Der Heyden says his company will still consider the change.
Sharemilkers do not own farms and are contracted to milk cows on someone else's property.
Until now, the country's 5400 sharemilkers have not been able to hold shares.
This has been a bone of contention because they make up about 35 per cent of the industry and produce about 40 per cent of the country's milk.
But the change being proposed is not compulsory.
Sharemilkers will have to negotiate their deal with farm owners to secure shares and returns from them.
Dean Nikora, one of four sharemilker representatives on the working party, said one of the biggest concerns was that sharemilkers would be forced to go "cap in hand" to their farm owners asking for a portion of the dividends.
"There's actually no legal rules to say we had to be paid it," he said.
"We needed to make sure it was clear for both parties where they stood legally and there is some mechanism in place so that these payments will happen automatically."
The deal is still to go to the individual companies.
But this is seen as a formality as each of the three main dairy companies had a representative on the working party.
The new sharemilking agreement, due out next month, will give sharemilkers access to income streams other than the basic milk payment.
Mr Nikora, who sharemilks 300 cows at Matamata, said the new sharemilking agreement would provide a mechanism for direct payments to sharemilkers.
Sharemilkers in the process of negotiating new contracts are protected by a clause in the standard agreement, which states contracts have to be renegotiated if the method of payment changes.
"It's really quite exciting in that it opens up heaps of doors and heaps of flexibility for sharemilking," Mr Nikora said.
"We feel pretty confident that if MergeCo doesn't happen, then NZDG will look at that type of set-up." - NZPA
