Dairy Reform Bill Sent To Curtailed Select Committee Hearing
The Dairy Industry Restructuring Amendment Bill will be given just three months consideration by select committee after it completed its first reading today.
The bill introduces a new regime for Fonterra’s milk price setting, proposed capital restructure, and share valuation.
Agriculture Minister David Carter said the freedom of farmers to enter or leave Fonterra was at the centre of earlier industry reforms
Fonterra remained the dominant player so the way in which its farm gate milk price was set essential to the sector remaining efficient and the bill before the House would make this more transparent and strengthen confidence in the price set.
Fonterra would be required to release information on how it worked out what it paid farmers and this would be monitored by the Commerce Commission.
The bill would also allow farmers to trade in some of their Fonterra shares, but only farmer owned shares would be able to vote, Carter said.
Damien O’Connor said Labour had a history supporting the dairy industry, but could not support the bill at the stage.
The legislation was premature and there was still too much debate within the industry about whether it would work.
``There are too many unknowns,’’ O’Connor said.
The proposed milk price rules were possibly a case of ``over-regulation’’ as there were no indication the current system wasn’t largely working.
There was also a lack of details on what the end result of farmers trading their shares in Fonterra would be and Labour was concerned that the trading would open up the possibility of overseas interests buying what is New Zealand’s most successful company.
Farmers who supported National did not support the bill, O’Connor said.
The bill was sent to the Primary Production Committee by 64 to 54 with National, Maori Party, ACT and United Future supporting.
The committee was instructed to report back by June 1 and under a new standing order the House debated the motion as it halved the select committee process from six months to three months..
The Government said it was a shortened process because Fonterra needed have the legislation in place by the end of June if it was to proceed with farmer share trading.
Labour said it opposed the shortened process because it was an important examination of a bill vital to the economy and it should be given full and close scrutiny.
ParliamentToday.co.nz is a breaking news source for New Zealand parliamentary business featuring broadcast daily news reports.