Dairy Industry Changes Show Government Reluctant to Confront Ideological Conflict

Proposed changes to the Dairy Industry Restructuring Act (DIRA) show the National Government is having trouble reconciling a free market with the reality of a near-monopoly co-operative being good for the dairy industry and good for New Zealand Inc.

Primary Industries Spokesperson Richard Prosser said the proposed changes, announced by Primary Industries Minister Nathan Guy today, went some way to overturning anachronisms in the Act, but not far enough in others.

“It’s a half-way house that sees the government half-heartedly admitting it’s got certain fundamentals wrong, but is still unwilling to take a common-sense approach over and above its beloved free-market neo-liberal mantra,” Mr Prosser said.

“Removing the requirement for Fonterra to supply milk to its own largely foreign-owned competitors is long overdue, and could do with being brought in a year earlier than mooted.

“But issues for Fonterra stemming from the requirement that they accept all intending shareholders, and all milk, have occurred because of government wanting to have its cake and eat it too. Either there is a near monopoly or there is a contestable market.

“Forcing Fonterra to pick up the crumbs that no-one else wants, while requiring them to effectively subsidise their competitors at the same time, was never going to work, and it hasn’t.

“We will be very interested to see the detail in the proposed Amendment Bill, particularly with regards to the Trading Among Farmers scheme. It was a cynical attempt to open the Co-op up to foreign ownership via the back door, and it has benefitted no-one but international traders,” Mr Prosser said.

ENDS

© Scoop Media