Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
30 APRIL 2015

Fonterra Drop Not the End of It – Government Doing Nothing

New Zealand First is concerned for New Zealand’s dairy farmers with Fonterra dropping its benchmark milkprice forecast 20 cents a kilogram of milksolids (kg/MS) to $4.50 and New Zealand First Leader Rt Hon Winston Peters believes it will go much lower still.

“Fonterra’s CEO and management have a plan but it is not working for farmers,” says Mr Peters, the Member for Northland.

“Take the abomination that is the Fonterra Shareholders Fund and more recently, Fonterra’s new ‘Mymilk’ subsidiary, which allows non-shared up farmers to supply milk to the ‘co-op.’

“Serious questions need to be asked but the best Fonterra’s Shareholders Council could muster when the dividend was chopped was to express disappointment. It has not even asked for staff bonuses to be symbolically axed and put towards the payout instead.

“There are things we can do in Parliament like revisiting the pro-competitor clauses in the Dairy Industry Restructuring Act, but Fonterra’s Board and management must come to grips with reality.

“With European and American farmers heavily subsidised, our dairy industry faces a perfect storm. Until the EU-Russia standoff ends, Fonterra’s business strategy is compromised and this government is doing absolutely nothing about that.

“Fonterra also needs to ask itself if an annual milk price is too blunt. Sadly the $4.50 kg/MS forecast may not be the end of it either. Of most concern is the 2015/16 season.

“New Zealand First is putting finishing touches to an amendment to the Receiverships Act that will introduce Agricultural Debt Mediation. The need for this Bill may become all too obvious over coming months.

“Sadly the government turns a blind eye to the one immediate reform that would help all farmers now: Reserve Bank Act reform and a lower dollar,” says Mr Peters.

ENDS

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