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Dairy Restructuring Bill Still Fails Sharemilkers

Dairy Industry Restructuring Bill Still Fails Sharemilkers

The Sharemilkers' Subsection of Dairy Farmers of New Zealand believes that the Dairy Industry Restructuring Bill tabled in Parliament today does not go far enough to address Sharemilkers' concerns.

Chairman Michael Pallesen said: "The industry proposed the removal of legislation and the merger of the major co-op dairy companies is supported by the Government. It is an industry initiative so we feel that the industry and the Minister should appoint an independent Sharemilker Transitional Body to be responsible for the benchmarking of new income streams."

Over 5,400 individual contracts, 42% of all milk supplied, is produced by sharemilkers and will be affected by the change in payment structure.

Today, the Food and Fibre Minister stated in the House three times that all contractual arrangements were the responsibility of sharemilkers and their farm owners.

"The Government cannot change the whole legal basis of the sharemilking industry without taking steps to ensure that no sharemilker will be worse off. The Government's need for this legislation to be rushed through should not cause sharemilkers to be disadvantaged."

The Sharemilkers National Executive considers that the lack of information to negotiate from, and the risk of fluctuating portions of the new payment structure, leave both parties in a precarious position.

"Sharemilkers should not need to negotiate a new contract on misinformation. It is in all parties' best interests that cash-flows be maintained during the transition, thereby reducing the advent of litigation and arbitration on a one by one basis merely because the industry has changed."

Farm owners who are in partnership with sharemilkers are in support of a smooth transition and fairness of payment structuring. Farm owners need sharemilkers as much as sharemilkers need farms to operate their business partnerships on.

"Why not ensure through legislation that the transition period is managed smoothly then let the normal market forces of supply and demand take effect in time!"

The other major issue facing sharemilkers is the opportunity to be shareholders in the new co-op. "In no way do sharemilkers wish to be granted any of their current farm owners shareholding as a result of achieving shareholder status."

There is a good deal of suspicion as to why sharemilkers want to be shareholders when traditionally shareholding is linked to land ownership.

"The nature of the dairy farm business is going to change, so we feel that the ability to purchase and hold shares (not by compulsion) is a logical way that we can participate in the industry's growth."

Mr Pallesen concluded: "The industry as a whole would benefit from this as sharemilkers instantly become a source of investment capital."

ENDS

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