BlackmanSpargo has for a number of years been proud to sponsor the New Zealand Dairy Industry Awards for the Waikato, Bay of Plenty and Central Plateau.

It’s an opportunity for us all to celebrate the accomplishments of those individuals who strive to be the best in the New Zealand dairy industry.

The contestants, whether they be from a farming background or relatively new to the industry, are all winners and we congratulate their participation and achievements for the 2010 New Zealand Dairy Industry Awards.

The second seminar in the series will be held on 5 May at the Reporoa War Memorial Hall and will cover Fonterra's Capital Restructure, the Resource Management Act and Cow Houses.

For more information on this free seminar please view the invitation by clicking on the following link.

The first seminar on Wednesday, 17 March will be held at the Reporoa War Memorial Hall and will cover Employment Agreements, Contract Milking Agreements, Sharemilking Agreements and Risk Management.

For more information on this free seminar please view the invitation by clicking on the following link.

You will no doubt be aware of the recent capital restructure and probably also aware that, as a result, the amount that you are paid as a shareholder is broken down into two components, namely a component for the price paid for milk and a dividend paid on the shares held in Fonterra.

Previously, Fonterra paid shareholders for the milk component and the value-added component and this was described as the “payout”. It is this term that has been used in sharemilking agreements as a means of determining the percentage to be paid to the sharemilkers under those agreements.

Shareholders will receive payment of the milk price component in the normal course of the year as milk is supplied. However, the dividend is paid in two instalments in each financial year with the first interim dividend announced on 31 March (and paid by 20 April) and the second, final dividend being announced on 31 May (and paid by 20 October).

The issue for owners and sharemilkers is how the change in the way the payout is now calculated might affect sharemilking agreements.

My experience of succession planning is almost exclusively limited to the rural sector, and particularly the dairy industry.

In the rural sector, the term “succession planning” refers to the process by which farm assets transfer to the next generation. In the districts in which I practice, most of the clients wanting succession plans comprise a generation of farmers who are married and who have had no assistance from their parents in acquiring a farm. I describe this group as first generation farmers. Notwithstanding this fact, I would assess the average net value of the joint assets as between $4,000,000 and $10,000,000.

This paper will examine the trends, the objectives and the legal structure options, concluding with a recommendation on how a successful, resilient and flexible succession plan is created.