THE Irish Co-operative Organisation Society (ICOS) called yesterday for a "full and frank debate" on the issue of changing the 51 per cent holding which some co-operatives have in their plc subsidiaries.

ICOS president, Mr Michael O'Dwyer, told the 101st a.g.m. of the umbrella body for the Irish Cooperative movement that while the 51 per cent rule was not an issue for all co-ops it nevertheless raised fundamental questions for the co-operative movement in general.

"The co-operative movement provides a secure and efficient outlet for the processing and marketing of our produce and it also has the capacity and ability to adapt to the changing needs of the market" he said.

"This ability was clearly demonstrated when the plc structure was developed in the late 1980s. At that time a safeguard was inserted in the co-ops' rules to ensure that members would retain control of the structure, specifically that the co-ops' interest in the plc can not be reduced below 51 per cent without the approval of shareholders," he said.

He said he expected that farmers would see the benefit of retaining a substantial stake in the business which processes and handles the output of their farms and at the same time they would want to see that business improving their livelihood.

"The ICOS view is that while the matter of changing the 51 per cent rule is an internal one for each co-op, any co-op considering amending the rule should fully debate the implications of such a move," he said.

"All shareholders should be consulted and informed about the advantages, disadvantages and consequences before being asked to consider any amendment," said Mr O Dwyer.

"The board may also consider other safeguards to ensure that producer interests are protected. While direct member share holding in the plc would complement the co-operative stake in the plc, one possible safeguard may be the transfer of an element of the plc business back to the co-operative," he added.

Mr O'Dwyer and Mr John Tyrrell, director general of ICOS, said they were aware of only one company, Kerry plc, which was advocating changing the 51 per cent rule.

They said they were not yet aware of how this would be done because the company had not yet published any documentation on the matter.