Flavell Te Ururoa: Questions for Oral Answer — Questions to Ministers Questions to Members 
Flavell Te Ururoa: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:670;Page:17256] 
5. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister of Agriculture 
: Is he concerned to learn that New Zealand’s first majority Maori-owned dairy company Miraka has reportedly stated that there is a serious risk that Fonterra’s proposed Trading Among Farmers exchange will be illiquid volatile and unstable; if so what assurances can he give Miraka and other dairy processors and industry groups that anti-competitive behaviour will not be tolerated? 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 I am aware of the concerns that have been raised by Miraka and indeed I have agreed to meet the directors of Miraka next week. I take this opportunity to assure the member that for Trading Among Farmers to work the market will have to be deep liquid and stable. I have made that absolutely clear to Fonterra. 
Te Ururoa Flavell 
: Is it the Government’s intention to introduce a dairy industry restructuring amendment bill to the House this year to facilitate Fonterra’s introduction of its Trading Among Farmers capital structure proposal; if so will he invite the Commerce Commission to thoroughly examine this proposal in order to avoid the risk of anti-competitive behaviour that would continue to drive up the price of milk for New Zealanders? 
Hon DAVID CARTER 
: The answer to the first question is that yes it is the Government’s intention to introduce legislation before the end of the year although final decisions will be made only when the consultation phase has concluded. The legislation will proceed only if there is confidence from other investors within the dairy industry and from general financial investors. I agree with the member that for Trading Among Farmers to work it is absolutely vital that there is a method by which the price of milk is set fairly. It is vital that there is some transparency around the setting of that price. The final point is in relation to the Commerce Commission I am aware the commission has already made a submission on the current proposal. 
Te Ururoa Flavell 
: Is the Minister aware of concerns from Waikato’s Tatua dairy company about future raw milk pricing; if so is he prepared to establish an independent milk price panel with representatives from the Commerce Commission and the Securities Commission and with oversight by the Ministry of Agriculture and Forestry to achieve enhanced milk price regulation? 
Hon DAVID CARTER 
: I am not specifically aware of Tatua’s concern but again it had the opportunity to make a submission. I expect that its concern is one that is shared generally by many in the dairy industry. The setting of the milk price is vital and as I said in answer to an earlier question for Trading Amongst Farmers to work satisfactorily it will be essential that there is some transparency around it. 
Hon Damien O’Connor 
: Does he support the statement in his own report on domestic milk pricing that prices in the domestic market are also influenced by the structure of retail and wholesale markets; if so can he explain the fact that although Australian farmers supply the same milk into the same international market Australian consumers are now paying $1 per litre for milk and New Zealand consumers are having to pay up to $2.75 per litre; and will he do anything about it? 
Hon DAVID CARTER 
: As the report the member referred to concludes the dairy legislation—and he was a vital part of it being passed by this House in 2001—does provide for competition for the domestic milk sector. It does not ensure competition and that is not a matter for me as the Minister of Agriculture but of course it is a matter for the Commerce Commission. On the point regarding the Australian retail milk price the member may be aware that milk is the subject of an intense price war between supermarket chains with the suggestion that it is a loss-leader for some of those supermarket chains in Australia.