Choudhary Ashraf: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
Choudhary Ashraf: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — Third Reading 
[Sitting date: 11 May 2011. Volume:672;Page:18609. Text is incorporated into the Bound Volume.] 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 This MP on this side of the House definitely does not believe that the dairy industry is a sunset industry. I explained that last night too.  
I support the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill and Labour supports this bill because it is clearly very appropriate that we extend the market-share threshold for the expiry of the pro-competition provisions in it. The dairy industry is our primary export industry. In the given international economic environment I believe that the industry is really helping our economy and our living standards in this country.  
I have a number of points I will make. The first one is that clearly it is rather interesting that the Minister of Agriculture said after the first reading of this bill that there would be a review of the Dairy Industry Restructuring Act. I wondered why he could not wait until after the results of that review were available before he introduced this bill so he could incorporate into the bill some of those results. Be that as it may I am pleased to say that this bill certainly allows farmers in the South Island particularly in the West Coast Regional Council’s area to now be part of the wider picture in terms of the supply of milk.  
It is interesting that when we were hearing submissions on this bill there were clearly two schools of thought. Fonterra was on one side and the rest—the private independent producers or processors—were on the other side. Fonterra was clearly not very keen that it had to supply discounted milk to the independents. But the independents were clearly keen to see more of this milk available to them so that they could add value. This is interesting because a lot of those independents—Synlait Tatua South Island cheese makers and others—came along too. They want to add value to the milk produced in New Zealand so that they can get some more markets overseas. Of course the Fonterra side was clearly not happy with the fact that a lot of these independent processors have not really added as much value as they suggested they would to get some new markets. There was quite an interesting debate among them about that at the time. This bill and the philosophy of the Dairy Industry Restructuring Act is to increase competition so that hopefully we can get some more companies—more processors—to add value in our overseas markets.  
As we get more into markets such as China India and the rest of Asia I think there will be demand for additional processing for niche areas. I hope the independent processors will make efforts to do that because Fonterra and the farmers are saying that after the years of research and development they have put into developing this industry here come these new processors many of them with overseas interests involved using the intellectual property and the research and development that has been done over years not only by our farmers and farming community but also by universities and research institutes. Fonterra and the farmers are saying that the new processors get the benefit of that but do not actually create the niche markets that they said they would. That has been an interesting argument and I think that argument will continue among those producers because clearly we want more high-value products to go overseas so we can get more of this milk processed just like meat. We want more of this milk processed here onshore so that we can add more value.  
At the same time there is an issue about price. When one looks at what is happening in Australia one sees that milk is being sold for $1 per litre and in this country we are paying more than $2 per litre. Again I hope this competition will increase—there is the sunset clause as somebody said to change the goalposts. I hope that we get some more competition so that prices come down because living costs at the moment with prices going higher all the time are not good for consumers who are suffering.  
We invited some time ago a professor from Massey University Jacqueline Rowarth to the Primary Production Committee to tell us what was going on in the agriculture sector. We invited her earlier to talk about agricultural education. Where is the problem in terms of agriculture not doing so well? I clearly remember her saying that the problem is that farmers are not getting a high enough price on the farm. I think it is very important for us going forward that we analyse the situation. Where are the problems in our economy particularly with agriculture? She came up with a very researched view that the problem is that our farmers—be they dairy meat or wool farmers—are not getting a high enough price for their products.  
The problem is that it is the middle people whether it is the processors or the supermarkets who are really creaming it off. I think that is an issue that Parliament the Minister and others involved should be concentrating on: how we can add value to what the farmer is getting within the farm gate rather than what is happening with price-gouging in the supermarkets and in processing. We can have all this competition but in the end if the farmers are not getting due value on their farm we will not make a lot of headway. 
I will also make a couple of further points. Going forward as we increase our animal production—particularly dairy—we need to make sure that the environmental impacts are also considered very seriously. I see in the statement from the Prime Minister that there will be some impact from increasing dairy numbers but not a big impact. I really take issue with that. As a scientist I can say that I foresee that the real problem in terms of utrification of our lakes and streams is that we will get more and more of this downpour and source pollution and more nitrates solids pesticides and chemicals will go into our lakes rivers and streams. We need to do more research into that. We need to understand the dynamics because over time if our rivers streams and lakes are more polluted then as we engage with overseas buyers they will come round and have a look at what we are doing. 
A lot of what we do in terms of dairy industry mechanisation and productivity we do very well. But I am really worried about the impact going forward. We—and the Minister—need to put more funding allocation from the Primary Growth Partnership into some of these research areas so that we can understand what is happening in the industry. As I have said on a previous occasion in terms of animal treatment and the issues we dealt with earlier with animal tracing—we have the National Animal Identification and Tracing Bill coming soon—I think this issue is similar in terms of the context we have with the overseas market. With those words I say that I am pleased to speak on the bill. I commend the bill to the House. Thank you.