Sage Eugenie: Dairy Industry Restructuring Amendment Bill — First Reading 
Sage Eugenie: Dairy Industry Restructuring Amendment Bill — First Reading 
[Advance Copy - Subject to minor change before inclusion in Bound Volume.] 
EUGENIE SAGE (Green) 
: 
 One of the reasons the Green Party opposes this bill the Dairy Industry Restructuring Amendment Bill is what is missing from it and the lost opportunity that the bill represents. It fails to amend the substantive Act the Dairy Industry Restructuring Act 2001 to allow Fonterra to be far more strategic about the expansion of its supplier base. It fails to protect our lakes our rivers our aquifers and areas such as the Mackenzie Basin from poorly controlled dairying expansion. Fonterra is a very successful cooperative and a major contributor to our economy. We want Fonterra to prosper but not at the expense of our waterways and our climate. We want Fonterra to be in business long term and to be able to rely on a genuine “clean green” brand not a marketing myth to promote its dairy products. But it is the rapid and uncontrolled growth in dairying that is trashing that $18 billion “clean green” brand.  
The bill fails because it fails to change the express obligation that the Dairy Industry Restructuring Act puts on Fonterra to collect and process milk throughout most of New Zealand. Section 73 of the substantive Act requires Fonterra to accept all applications to become a shareholding farmer. It also requires the company to accept all applications to increase the volume of milk supplied by a shareholding farmer. The only circumstances where Fonterra can legally reject supply are set out in section 95 of the substantive Act. That allows Fonterra to reject a prospective supplier only if the cost of transporting milk from the new entrant is greater than the highest cost of transporting milk from another shareholder farmer. So the circumstances within which this can be exercised are very narrow. The bill does absolutely nothing to change that obligation. It does nothing to give Fonterra the ability to apply sustainability criteria or to decide whether or not it wishes to grow its milk supply in areas such as the Mackenzie Basin given the biodiversity loss that that involves or whether it wants to slow down the rate of growth of its milk supply in sensitive catchments such as that of Te Waihora—Lake Ellesmere—New Zealand’s most polluted lake.  
As Fonterra’s own legal counsel said during the company’s resource consent applications to treble the size of its Darfield milk processing factory before that factory had even begun operation: “…if individual farmers decide on their own economic or other grounds to convert to dairy then in almost all circumstances Fonterra is required to collect and process that milk.” So when that intensive cow-cubicle farming was proposed for the Mackenzie Basin we had the spectacle of Fonterra spokespeople wringing their hands and saying that although they did not necessarily support dairying in the Mackenzie and although they did not necessarily support cubicle farms there was nothing the company could do about it because the Dairy Industry Restructuring Act obliged them to pick up the milk. The bill fails to deal with that obligation and the implications it has for water quality from the decisions of individual farmers to convert to dairying. It fails to allow Fonterra to regulate the major component of its business the supply of milk.  
The Green Party recognises that there are limits to growth and that to prosper long term Fonterra cannot continue to increase its milk volumes at the 5 to 8 percent growth that has occurred recently. Dairying has grown so rapidly in Canterbury that we have the spectacle of individual dairy tankers—43 of them—driving 800 kilometres each day to take milk from Canterbury down to Fonterra’s plant at Edendale. This of course involves huge greenhouse gas emissions. So by not amending the substantive Act to give Fonterra the power to decline to pick up milk the bill is committing the company to a never-ending growth strategy which is not sustainable.