Comment: Communication on sharemilker contracts vital

Federated Farmers Sharemilkers' Section Chairperson Richard McIntyre. Photo / Supplied

Comment: It is important for farm owners to consult with sharemilkers before opting into the fixed price payment, writes Federated Farmers Sharemilkers' Section Chairman Richard McIntyre.

It's about the price of milk and where everyone in the food chain sits – hopefully together.

With Fonterra and the introduction of its fixed milk price option, some dairy farm owners might think what the dairy co-operative is offering is too good a deal to pass up. In some cases it might be.

However, when signing up to something so significant, farm owners who engage sharemilkers must make sure they consult with their sharemilkers.

I agree with lawyer Jonathan Pitts from DLA Piper, who points out that farm owners are required to consult with their sharemilkers on any change to farm policy or where their remuneration may be affected.

Read more from Federated Farmers here.

It is therefore important for farm owners to check their legal obligations towards their sharemilkers in relation to fixing the price.

Opting into the fixed price payment without consulting the sharemilker could result in the farm owner breaching their agreement.

This is particularly so if the farm gate milk price ends up exceeding the fixed price to the detriment to the sharemilker.

As sharemilking contracts will have been signed by now, a conversation between the two parties must occur to make sure that the sharemilker understands the implications and agrees to this change.

Any change must be in writing and signed by both parties. This should mean no headaches for people and less stress for their families.

Fonterra has been pretty good at reminding people of their obligations, but there needs to be more light shone on this subject to make sure everyone is aware of what is going on and everyone can take part, informed.

We live in a country after all, where no one likes to confront difficult issues head on and talking frankly with the boss might be challenging, but everyone who this arrangement affects must talk with each other.

Contracts are the only way to make sure everyone is on the same page. They are there to protect everyone involved.

If you are worried at all about what you might be signing never hesitate to consult your local community law office, your own lawyer or if you are a member of Federated Farmers, call our free phone (088 327 646).