Choudhary Ashraf: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
Choudhary Ashraf: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
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Dr ASHRAF CHOUDHARY (Labour) 
: 
 It is my pleasure to speak on the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. The dairy industry is the largest industry in this country. There are 10500 dairy farmers who produce a huge amount of milk and we are the largest exporter of milk and milk products in the world. We are very proud of the quality of products we sell overseas. When one travels overseas one sees the products from New Zealand and feels proud of the quality that is being exported. Anything we do in terms of improving the efficiency of our system and the quality and standards of our products is always welcome. 
I am proud to stand in this House to support the bill because it is intended to improve the dairy industry particularly in its restructuring. The bill sets up new sunset provisions in this restructuring. Along with Government members particularly those on the Primary Production Committee—and I am sure this bill will be coming to that committee—I will be very happy to scrutinise it further. 
The purpose of this bill is very clear. It amends the threshold sunset clause in the Dairy Industry Restructuring Act to increase the market threshold after which Fonterra no longer has to provide 5 percent of the dairy solids at a regulated price. The threshold is currently set at a 12.5 percent market share of the collected raw milk for independent processors in the North Island and at a 10 percent market share in the South Island. These thresholds will likely be reached in May 2011 and 2012 respectively but a more recent analysis of the dairy market suggests that at this stage the independent dairy processor will not be sufficiently developed to operate effectively and provide adequate competition to Fonterra in the domestic dairy processing market. So it is important that we advance the date further into next year and the year after. 
Although we support the bill at the first reading we have some reservations about supporting it further because we want to make sure that when the bill comes to the Primary Production Committee the submissions from various groups in the dairy industry will be taken into account. We also want to make sure that the dairy industry is competitive and that dairy farms and the dairy industry are not taken over by foreign people particularly in relation to the fact raised earlier with regard to what this Government is doing in terms of selling our farms overseas. I know that thousands of hectares of land have been sold into overseas hands in recent times. I was reading the other day that some farms have been sold to universities in America and it will be interesting to see what the Minister Maurice Williamson will do. 
Hon Maurice Williamson 
: We’ve hardly sold anything compared to you lot. I’m ashamed of how little we’ve sold compared to you lot. 
Dr ASHRAF CHOUDHARY 
: I am watching actually; I ask Mr Williamson what he is going to do about those farms being sold to the Chinese. I wonder whether he will sell those farms into Chinese hands. That will be a real test. I have heard the comments that he has been making in recent times about foreigners but it will be very interesting to see what he does about that potential sale to Chinese buyers. I think that that is an issue for all New Zealanders. 
We want to make sure that our land particularly our productive land is kept in our hands and not sold to foreign enterprises. There are people who have a lot of money who want to buy into our farms. It is important that this Government should take cognisance of what New Zealanders are saying in terms of sales to foreigners. 
Labour supports the extension of the threshold at this time but we note that dairy processing companies should not expect this treatment for ever as New Zealanders’ farms could not afford to subsidise them indefinitely. It is both interesting and confusing that this bill is being read just a day after the Minister announced a review of Fonterra’s obligation to supply milk to independent dairy processors. It is interesting that the Minister on one day is saying one thing but today we have the bill coming through. I suppose it has taken some time to prepare the bill but clearly there is a bit of confusion in the Minister’s mind. 
We support the review of Fonterra’s obligation to supply milk to competitors as it is of concern to see companies such as Synlait which is owned by offshore interests being subsidised by New Zealand farmers. That really just mirrors a larger issue whereby the increasing sale of farmland to foreign investors risks pushing Kiwis off farms shareholder rights are being handed over to Fonterra our largest company and our profits from this $20 billion industry are being funnelled offshore. That would be really unfortunate. 
As a scientist with a farming background I can see the potential particularly in Asia. There is huge potential coming up not just for the Chinese market but for the Indian market and the wider Asian and Middle Eastern markets. There is huge potential for milk products. We have to make sure that there is enough competition in the market and that we do the right thing in terms of exporting our products. 
Only a few minutes ago before I came to the House I was speaking with Mr Graeme Peters from the New Zealand Association for Animal Health and Crop Protection. He was telling me about some of the potential issues that could be coming in terms of residues for example in our soils and crops and in the use of chemicals in New Zealand. I think that those issues are concerning New Zealanders as well. We have to make sure that on one hand we have the right products but at the same time we ensure that those products do not carry any residues particularly pesticides in the products we export. There will be pressures particularly of a competitive nature coming from overseas where people want to have products that do not have any residues particularly from chemicals. It is important that as we delve further into the Asian market the products we have not only from our dairying industry but also from the rest of the farming industry are produced to the standards required by customers—and we do that in the EU now and in the American markets. 
Once again I say that Labour supports the bill and we are looking forward to submissions in the Primary Production Committee where we hope to scrutinise this bill further. With those words I support the bill.