Dairy Farmers Urge Holding Off On Peak Rights

12 November 2000

Rotorua/Taupo Dairy Farmers Urge Holding Off On Peak Rights

A meeting of the Dairy Farmers of New Zealand's Rotorua/Taupo Section has passed a resolution urging all dairy farmers not to support New Zealand Dairy Group's Peak Rights or Kiwi's Co-operative Dairies Ltd's Capital Notes proposals until there is a unified industry approach to the growth in New Zealand's milk supply.

"Rotorua/Taupo Dairy Farmers of New Zealand strongly supports the concept of a mega co-op and that it should be the dairy industry's priority," said section chair Lachlan McKenzie.

"These issues should not distract from the formation of a mega co-op. We do not want another smokescreen in a few months time when the NZDG comes out and states that the merger cannot proceed because of different share standards."

"NZDG is going through a series of changes, leaving the shareholders uncertain as to where the company is heading. Dairy farmers are not receiving sufficient, good quality information to debate the alternatives and the overall implications," he said.

"The integration of Kiwi, NZDG and the NZ Dairy Board has the potential to increase suppliers' payout, far in excess of the expected 3.5c per kg milk solids by year five from the implementation of Peak Rights, assuming an average growth of 6 percent per year.

"What would be the effect on the industry if Peak Rights were implemented and resulted in the growth falling below 2 percent per year. Strong levels of growth are required to maintain a vibrant and successful industry. It is not an option to have no growth."

"Within one generation, dairy farmers have gone from being the poor relations of sheep and beef farmers to being a leading option. Sharemilkers used to comment that they would milk cows until they could afford to purchase a sheep farm. Why has that changed?"

"The dairy industry has grown quicker than any other farming enterprise through increased productivity both on-farm and in the co-operative industry."

"It is essential for continued growth, that the dairy industry has a unified approach," Mr McKenzie concluded.

For further comment: Lachlan McKenzie 07 332 3440 Chairman, Rotorua/Taupo Dairy Farmers of NZ 289 Kapukapu Road, RD2, Rotorua

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