The government has backed Fonterra's capital restructure, after initially raising concerns about the proposal and whether they were in the best interests of the industry. Changes will be made to the Dairy Industry Restructuring Act to allow Fonterra to change its shareholding rules and limit the size of the related investment fund. Fonterra wants to make it easier to join the co-operative, while maintaining farmer ownership amid falling milk supply. Agriculture Minister Damien O'Connor says the Fonterra proposals will be supported, but the government will ensure greater official scrutiny in the setting of milk prices, outside management of trading in Fonterra's shares and units, and more transparency. So what does this all mean for Fonterra, for farmers, and for milk prices? Kathryn finds out from Arie Dekker, the head of research at Jarden.
