A Canterbury dairy farmer opposed to Fonterra's Trading Among Farmers scheme says it is inappropriate that provisions for the scheme are included in new dairy industry legislation.
Leonie Guiney from Fairlie was speaking on behalf of 750 farmers at the Primary Production select committee at Parliament on Monday.
The select committee is considering submissions on proposed changes to the Dairy Industry Restructuring Act, which among other things will pave the way for TAF.
Fonterra says the scheme would give it a stable and permanent capital base by removing its obligation to trade shares with its suppliers, switching the trading onus to them.
The main sticking point in TAF is a proposed shareholders fund, which would allow outside investors to buy the dividend but not the voting rights of shares that farmers deposited in the fund.
After gaining a mandate from farmers for TAF in 2010, Fonterra has recently announced it will give farmers another vote on the scheme in June.
Leonie Guiney told the select committee that legislative discussion around TAF is premature.
"Under TAF, your bill defines the securities in this proposed fund and confirms that 25 percent of Fonterra's equity will be contributed not by farmers, but by others.
"It's a fair assumption that mum and dad Kiwi investors haven't got a chance in Hades of getting their hands on any of these securities.
"It's pretty obvious that this is the sale of the century to offshore institutional investors - and a sale at a discount - of that equity I referred to earlier that's been built up inter-generationally in Fonterra, and it's not appropriate.
"You'd have to be dreaming to think that such investors will not form highly organised, highly well-funded lobby groups to exert downward pressure on that milk price.
"Finally (farmers) have been given another vote - they don't know what sort of a vote, or what they're voting on, and we need some information. Any legislation would be wholly inappropriate that relates to TAF, until a genuinely open consultation process has occurred for farmers."
Monday was the first day of hearings into some of the 800 submissions the Government has received on changes to the 11-year-old dairy industry legislation.