An open letter to Clover CEO

I find it amazing that Johan Vorster is now SA’s 169th wealthiest man, according to the Sunday Times ‘Rich List’.

- Advertisement -

This translates to about R210 million in equity. It occurred in a relatively short period since he joined Clover in 2000 and became CEO in 2006. But I would rather focus on his complete disconnect with the reality of dairy farming in SA. This wealth was accumulated while many farmers are finding it hard to survive on the lowest milk price in the world, and many have gone out of business.

The general sentiment among farmers is that Vorster is so far removed from producers and the general situation in the dairy industry that he does not understand the impact of Clover’s policies or the level of anger at the enrichment of a few at the expense of many. Clover is not alone in the dairy industry and in this corporate extraction of agricultural wealth, but it is setting the example very well.

Although farmers also receive shares from Clover, most have sold them and the value of the shares spread over five to seven years is completely offset against the deficit in the milk price. The current situation is unsustainable and unjust, and farmers must do something about it. It is unfortunate that every private distributor (PD) looks to, or hides behind, Clover’s policies, while they should all be paying at least R1,00/ l more for milk at the moment.

- Advertisement -

Not one has shown any correlation in the price they pay to the commodity they deal with, and unlike most other countries, the SA farm-gate price has not followed world trends, but all our inputs do. SA farmers and shareholders should remove greed from the boardroom and rise up against this corporate injustice. Clover says all milk buyers pay a market-related price. But a real international market-related price at present would be about R5,23/l.

SA processors and retailers are just too powerful and, it seems, either greedy or inefficient. It is just too easy to turn to farmers for shortfalls. The consumer price won’t need to move up much to accommodate an increase for farmers.