King Colin: Dairy Industry Restructuring Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
King Colin: Dairy Industry Restructuring Amendment Bill — First Reading 
[Sitting date: 03 April 2012. Volume:679;Page:1578. Text is incorporated into the Bound Volume.] 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to rise to speak to the first reading of the Dairy Industry Restructuring Amendment Bill. In doing so one does cast one’s mind back to this debate having been quite long and quite tortuous for the many shareholders within Fonterra. I would like to just pay a tribute to the many farmers who are out there and who at this time of the day will be milking the cows. They will be heads down and they will be working to make sure that those animals are cared for in a very husbandry manner and that the staff who are working on those farms will be cared for well—whether they be immigrant labour or whether they be sharemilking people: couples who are building their way up to getting into farming.  
There is no doubt that the dairy industry has been a breath of fresh air when we consider some of the other models that we have around—whether it be the meat industry or the wool industry. So from that point of view when you see where the dairy industry came from—that is what is represented today by Fonterra—it was once the poor cousin of the sheep and beef industries and today it is looked at to be the model going forward. We have had a lot of that conversation through the debate today and on that basis really it is up to the Government—United Future and National and ACT—to ensure that this bill does go through to the Primary Production Committee.  
There is a lot of passion about and a lot of commitment to this piece of legislation from both sides of the House. It is very important that we hear the clear messages coming forward from the submitters because issues have been raised today that have meant that part of the House is against this bill. But really it is very important that we do get it right and that we satisfy the other side of the House that in actual fact we will retain 100 percent ownership by way of control of voting shares in Fonterra. We recognise that Trading Among Farmers is reasonably controversial. However it is something that has been through a fairly robust process and has been presented to this Parliament. We need to give it due consideration. As far as the redemption risk goes effectively it is a problem that confronts cooperatives that having the access being able to enter and to exit freely does present a risk in that capacity. Whether that risk is as material as we have been led to believe I believe will be borne out by the select committee process. That said we have also got the dubious situation to find ourselves in of what is deemed to be a monopoly and what is deemed to be competitive by way of a model.  
There are other issues that will come out during the submission stage if this bill goes to the select committee and they will be around the continued supply of regulated milk. I look forward to the debate. I trust that the debate will not broaden out too much and that it does stick to the principles that are articulated in this bill which are to produce and maintain the most effective dairy industry or milk production in New Zealand. When we do go down this track and we look at the future we have got a company that by world scale may not be large but it does the bulk of the cross-border exporting of milk. What we have seen quite clearly is a challenge quite often to the model of what we define as healthy competition because with competition what we see often is a reversal back to the very fundamentals of exporting rather than the adding of value. It is something that really does worry us because when we see competition coming in and arguing its case for a fair go we want to see that it actually contributes to the innovation and the adding of value.  
This is going to be a very interesting debate no doubt within the select committee because it is about the very fundamentals of our economy and our primary sector. I look forward to the submissions. I encourage everybody to engage in the process but I do say to the other side of the House that it is time to have this debate it is time to challenge some of our fears and it is also time that we looked at the legislation to bring it up to a situation where we can empower Fonterra to progress ahead into the future with confidence. It is a risk and there are challenges but can anybody over on the other side of the House ever tell me where business does not come with its risks? When we are working with a perishable commodity like milk I am confident that we will continue to have a cooperative spirit. My recommendation is that as we go through this piece of legislation and refer it to the select committee the other parts of our primary sector look at the particular model of Fonterra and learn from it. Thank you. It is a pleasure to speak on this bill and to support its referral to the select committee. I look forward to hearing the submissions with great interest.