King Colin: Meat Board Amendment Bill — Second Reading 
King Colin: Meat Board Amendment Bill — Second Reading 
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COLIN KING (National—Kaikoura) 
: 
 It gives me pleasure to rise to speak to the Meat Board Amendment Bill. It also gave me great pleasure today when we farewelled Dame Silvia Cartwright that our main course was a beautiful fillet of lamb. It should make all New Zealanders remarkably proud that we have the platinum level of food safety and it is something we never want to undervalue. 
In answer to my colleague from the Maori Party Hone Harawira I acknowledge at this time the great work of Regina Rudland and Wayne Walden who were Maori members of the New Zealand Meat Board and who worked towards setting up Meat and Wool New Zealand and the Meat Board as it is today. I also acknowledge the Meat Board and Meat and Wool New Zealand for the leadership role they have taken with the Maori Farmer of the Year Award and for the consultation they undertake regularly with the Maori stakeholders in the industry. 
I also note the point of view that although those meatworkers would have been on $13 an hour there would also have been a substantial bonus in there in that if they worked as a team they would have been remunerated at a rate of close to $20 an hour. I think we can do better but we have done quite well to date. 
Applying ourselves to the Meat Board Amendment Bill we can see that it does clarify the situation as it stands today. In actual fact the purpose of the amendments are to clarify that under the existing law the allocation of quota to meat processors who do not export is lawful. That is where it is today with the Meat Board. The Meat Board allocates its quota to meat producers or processors on that basis of production history. It all sounds very simple and straightforward but those meat plants that process have to have EU and US certification to be eligible for quota. They do not just get it by right; they have to be able to certify that their plants measure up to the highest food standards possible and only at that cost and expense are they then eligible to be able to get that quota. It is also very important for us to remember that under the Doha round the Crown owns the quota. However it has set it up in such a way that it has enabled the industry to capture that value. It is on that basis that we want to walk through the steps of what is so successful. It has been running since 1997. It was enshrined in a 2004 Act and this amendment clarifies that position. Meat processors are included in this benefit whether or not they export and exporters are included whether or not they are processors. Those are two steps. The third and fourth step is that returns from quota allocation will flow to farmers who sell the livestock to the meat processors because of the competition that exists between the various meat processors and companies. 
It was interesting to note that one example of how this operates is that quota that has been allocated to a number of a companies or a few companies is traded and people who do no processing at all but purely export do business. They buy the quota and the trading that occurs is a small amount around about 2 to 3 percent. However it is well structured in the sense that the Meat Board measures month by month the amount of meat that is exported to a quota market whether it is to the United States or to Europe and they work this through. They constantly monitor those who underutilise their quota and give them warning signals as to the nearness of the responsibilities of releasing that quota so that it can be utilised by the rest of the industry; 1 October is the date when those who are holding quota and have not used it have a time to return it to the Meat Board for reallocation to general quota. On that basis if they do not utilise that quota they are severely penalised in two ways. They are penalised by losing the quota and they are also penalised by a cash penalty. 
It is a very interesting situation we find ourselves in. When we look at the amendments we have to realise that they amend the provisions inside the Meat Board Act 2004 and when we go through the various aspects of it I can tell members that probably the most contentious that arose in the Primary Production Committee which we had to give our full attention to was section 24(5) inserted by clause 3 which states: “To avoid doubt an allocation mechanism may provide for an allocation of access to quota markets to any person who is a registered exporter whether or not the person currently exports meat products.” That was a clarification around the basis that up until that point there was a moot point as to who should be the ones who were allocated the quota. There was the view that exporters were the ones who should be allocated quota and there were those who contested that for the betterment and the capture of complete value to the market it should go to all meat processors that are registered or certified as able to export. That was overcome reasonably. 
The next point came up in section 32 around the insertion of the word “eligible” in clause 4. In that amendment to section 32 eligibility again clarifies the situation of the decisions. The amended section concludes by stating “or processing of meat products eligible for export.” so it helps to clarify the situation quite clearly that it is consistent with the allocation mechanism that the Meat Board is using. 
Finally we come to the fifth point in clause 5 which amends section 36. Clause 5(1) uses the phrase “persons applying for or allocated quota” and in doing so again it makes that section consistent with the terminology throughout the Act now. Where section 36(1) stated that fees are payable “by meat exporters” it will now state: “by persons applying for or allocated quota”. Section 36(3) previously stated: “The Board must take all reasonable steps to consult with meat exporters on the initial level of the fees and on any increase in the fees.”; clause 5(2) omits “meat exporters” and substitutes “registered exporters”. 
So again it certainly does tidy up aspects of the Act itself by clarifying how the quota may be allocated and we can take comfort from the fact that on a regular basis the Meat Board has to consult with the industry. That is borne out in section 26 “Consultation” which states: “The Board must not establish any particular allocation mechanism without consulting those meat industry organisations the Board thinks appropriate about its proposed establishment.” I can assure members that that process has been gone through over the last 18 months and I am confident it will reoccur again because section 29 “Review of allocation mechanisms” states: “(2) The Board must review each unrevoked allocation mechanism at intervals not greater than 5 years. The first review of each allocation mechanism after the commencement of this Act must occur within 5 years of that commencement.” So we should take comfort that there is a huge amount of accountability of the Meat Board to the industry and that the communication with the Meat Board itself—with its industry representatives and its farmer representatives—is very alert and reactive to the industries and to the value that those quota markets have to New Zealand. 
It gives me great pleasure to support this bill through its second reading. I trust that New Zealand and all those farmers out there who are lambing at the moment will be able to sleep comfortably in the knowledge that we have the best access in the world to quota markets. Thank you Mr Speaker. 
Bill read a second time.