By PHILIPPA STEVENSON agricultural editor
New Zealand Dairy Group's production-linked, capital-raising mechanism goes to the vote on Friday amid concern that it will contribute to the dairy industry's decline in the North Island.
Statistics compiled by the Livestock Improvement Corporation for the 1999/2000 season show a drop in North Island cow numbers
of about 78,000, or 3 per cent on a herd of 2.6 million.
The unpublished figures show an increase in South Island cows of about 20,000 - a 3 per cent lift on the southern herd of more than 660,000.
Waikato farmer John Scott said that meant Dairy Group's "peak rights" proposal was urgently needed in the South Island but was not right for the North.
"It's a cumbersome thing that could impede advances in business here or contribute to people dropping out of dairying."
Mr Scott said he would speak against the proposal, which the company had designed to help meet the costs of providing factory processing capacity for a growing milk supply at the height of the season.
Dairy Group's plan is for farmers who boost supply - whether increasing production from an existing farm or by creating a new unit - to pay $30 for each litre above their historical peak.
New Dairy Group shareholders, with no record of supply, would pay for every litre they produce, in addition to buying shares in the company at $2 per kilogram of milksolids.
The company, which has had a two-year moratorium on new supply while it tackled how producers could finance extra processing facilities, expects to receive $4.4 million in the first year of the scheme and $330 million over five years.
Other opposition to the proposal has come particularly from Bay of Plenty shareholders who are ardent supporters of the mega co-op plan in which Dairy Group and fellow giant company Kiwi Dairies would merge.
