King Colin: Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill — First Reading 
King Colin: Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill — First Reading 
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COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to rise and speak on the first reading of the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill. I think it is worth acknowledging some of the other speakers who have spoken before us and addressed some of these statements. This bill is hugely important to the nation’s economy and needs to be seen in the light that it deserves to be seen in. 
It is interesting to go back to the first Labour speaker Damien O’Connor who accused the Government of sitting on its hands. I would accuse the previous Labour Government of disregarding farmers because that member came into the House only due to the retirement of another member. That is where farming is measured in the minds of the Labour Party. Farmers are so far down the party list that they do not make it into the House unless somebody retires. From that point of view I think it is a bit lame and limp to accuse the Government of sitting on its hands when Labour did nothing to promote farming in its 9 long years in Government. 
Another point that is worth making is that Fonterra has been wearing this inequity for 7 years and the best that Labour could do when in Government was to just do a report. It has effectively been left up to a John Key - National-led Government to do something about it. Those are two points that I would like to make and put back to Labour—that it has sold farmers down the drain. 
With regard to the second speaker who spoke about primary growth partnerships we are very positive about that initiative. It will put $140 million per year into research and development and I am sure that it will satisfy the thirst of Andy West if Andy would only stay on the same verandah for more than 5 minutes. 
I turn to the comments from the Greens. They were advocating support for the cooperative model one minute then bashing up farming for every other reason in the next. I point out that it was Fonterra that initiated the Dairying and Clean Streams Accord. It has been hugely successful and is something that we want to celebrate. At this time I also take the opportunity to acknowledge Barbara Stuart on the release of her book  
My Valley My River: The Rai Area  
and the efforts of Landcare Trust especially in my own electorate of Kaikoura and in the Rai Valley where it has done tremendous work in making sure that it develops best practice and improves on it. 
I will touch on the cooperative model for a moment. Having come from the meat industry I look at it with a high level of admiration. I have given it a lot of thought and in my mind the single answer for why there is a high level of cooperation within the dairy industry is that it is dealing with such a perishable product. If the industry did not cooperate within 4 days the product would be history. If we stop and think about the meat and wool industries we see that the meat industry shipped its first shipment of frozen meat from Port Chalmers in 1882 and it took months to get to its market and then it was sold. Meat is not as perishable as milk. When we look at wool we see that it is not uncommon for farmers to sit on their wool when prices are low. Today we are seeing a brave attempt by the Minister of Agriculture to work towards a position where we can lock in some gains for producers so that they do cooperate. 
I will now move on to the bill because it is very important. To give some context Fonterra is 90 percent of the industry but that is 90 percent with conditions. I sometimes lament the watchful eye of the Commerce Commission when it tries to make sure that all the competition rules are in place. When Fonterra was formed it had to pick up all the milk supplies. That meant that it had to pick up the milk supplies over in Takaka way out there in Golden Bay. It had to pick up milk in places where it was not economically viable. 
Shane Ardern 
: And paid the same price. 
COLIN KING 
: As my learned friend Shane Ardern mentions Fonterra had to pay the same price. There is no level playing field for Fonterra. 
When we look at it in the context of competition we can see competition sprouting up in the areas where there is low apple production and fewer opportunities. The second Labour speaker also mentioned that we are not seeing innovation. I say to that member and to the rest of the Opposition that we are certainly not seeing innovation from the competition. In actual fact if you look at the commercial disciplines around being successful you produce the cheapest simplest product— 
Grant Robertson 
: I’m sure the Speaker doesn’t. 
COLIN KING 
:—and I was not referring to you Mr Speaker. I apologise. We go about making a product as efficiently and as cheaply as possible and we do not take risks in adding value. If we look at where the value is being added we see the innovative way that Fonterra has been able to market its products into 140 to 150 other countries overcoming trade tariffs and overcoming tariff barriers of up to 70 percent. I think it is cruel to an extreme to point the finger at Fonterra and say it is not innovative. If there is one fault with Fonterra it is that it has become too good too soon. As my friend Shane Ardern mentioned it has had year-on-year growth of 5.8 percent. If our economy had risen to that level we would be back to where we should be aiming—in the top half of the OECD. 
We have 600 million litres of milk available. That is quite interesting because the way the restructuring Act of 2001 was worded the Minister of Agriculture may require a new cooperative which was Fonterra to supply up to 5 percent of its New Zealand milk supply to independent processors at a regulated price. So that is what we are actually talking about. It is all very good but we are right on that threshold already. 
This bill will be referred to the Primary Production Committee which we will be ably chaired by my learned friend Shane Ardern from Taranaki - King Country and it will be dealt with in a very professional manner. We will deal with it in such a way that there is the best outcome possible for Fonterra because we are very very proud of Fonterra. It has the critical mass it has an international brand and on that basis we can celebrate it internationally. It is the only international company in this land mass of some 4.5 million people and is a shining light of direction to many of our much older pastoral sector industries such as the meat industry and the dairy industry. 
It gives me great pleasure to commend this bill to the House and I look forward to the opportunity of casting our eye over it at the select committee. Thank you very much.