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Farmers Want Safeguards Over Reserves

Farmers Want Safeguards Over Reserves

Farmers want a clear division between management of quota and farmers' reserve funds in a restructured New Zealand Meat Board, said Ian Corney of Federated Farmers of New Zealand (Inc).

Mr Corney called for a 'ringfencing' between quota and reserves in a submission today to the Primary Production Select Committee, which is hearing views on the Meat Board Restructuring Bill.

Federated Farmers supports the legislation, which paves the way for a better industry structure and the chance for farmers to have more say over their industry.

The bill allows for a restructuring of the New Zealand Meat Board. It will continue managing meat export quota and reserve funds, but no longer perform industry-good functions or have power to levy farmers.

"Farmers are broadly pleased with the legislation but there must be a 'ringfencing'. Farmers do not want cross subsidisation between quota and reserves. We are opposed to the board using the $100 million held on behalf of farmers to fund future liabilities from managing quota," said Mr Corney.

The bill says the board must maintain a prudent level of reserves to avoid jeopardising quota markets and the integrity of quota management systems.

"This provision assigns a priority for farmers' reserves to back up the quota system and enables the use of reserves to settle liabilities from disputes over quota allocation," Mr Corney said.

"Farmers have made it clear over the restructuring process that they do not want their reserves whittled away to subsidise the quota. Farmers seek greater transparency and accountability in reserves management," he said.

Farmers support a provision in the legislation for a policy specifying the object and purpose for which reserves may be held and spent, and sets out safeguards over the money. The provision should make the treatment of reserves more transparent and accountable.

Mr Corney is Chairman of the New Zealand Meat and Fibre Producers' Council (NZMFP), an industry group of Federated Farmers.

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