28 March 2012

Dairy Industry Restructuring Bill vital to all Kiwis

Federated Farmers looks forward to submitting on the Dairy Industry Restructuring Amendment Bill (DIRA) that is of significant importance to New Zealand’s economic future.

“If the policy settings for milk pricing at the farm gate become arbitrary, then it’ll not only shoot our largest export industry in the foot, it will directly affect the price consumers pay for their milk,” warned Willy Leferink, Federated Farmers Dairy chairperson.

“That’s why Federated Farmers looks forward to representing farmers through the Select Committee process. Of course, we don’t know if the Bill will come before the Primary Production Select Committee or the Commerce Select Committee.

“Even if it goes through the Foreign Affairs, Defence and Trade Select Committee, we’ll be there representing our members. Our members are farmers who make up a majority of Fonterra’s supplier-shareholders and a majority of New Zealand’s dairy farmers.

“During the consultation phase, Federated Farmers made it clear changes relating to Trading Among Farmers (TAF) are premature until farmer shareholders have a clear understanding of the value proposition involved.

“Many farmers told us during our internal consultation, they do not trust the Government to look after the best interests of Fonterra Cooperative Group’s farmer-shareholders. It’s why we view Commerce Commission oversight as potentially a good thing.

“I need to make it clear only Fonterra’s farmer-shareholders are the real stakeholders here. Legislation must not lead Fonterra’s capital restructure and its shareholders must be left to determine that process without interference.

“Outside of some aspects of TAF, which is much more significant to New Zealand’s economic future than who buys the CraFarm’s, we largely back many of the proposed changes to the DIRA.

“From a quick look through the Bill though, we are disappointed the Government still requires only Fonterra to set shares at Fair Value. We will be making some robust representations about that,” Mr Leferink concluded.

Please click here for Federated Farmers submission on the Dairy Industry Restructuring Act (the DIRA), involving the regulatory regime around Fonterra’s Capital Restructuring, Fonterra’s farm gate milk price setting and the Raw Milk Regulations.

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