Robertson Grant: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers[Sitting date: 17 November 2015. Volume:710;Page:8163. Text is incorporated into the Bound Volume.]5.GRANT ROBERTSON (Labour—Wellington Central) to the Minister for Primary Industries: Does he agree with the advice of the Prime Minister in regard to dairy prices made in November last year when the average price at the global dairy auction was US$2561 a tonne for farmers not to get too worried and that the price would bottom out soon and start climbing again; if so can he advise what is the latest average price at the global dairy auction?Hon NATHAN GUY (Minister for Primary Industries): Yes. The very good point the Prime Minister was making is that global commodity prices are indeed volatile. They go up and they go down but the medium to long term outlook for dairy is very positive with growth in key markets in Asia. The latest average price at the Global Dairy Trade auction overnight was US$2345 which is 29 percent higher than the August low. As we all know prices have been affected this year by international factors beyond our control including growth in the overall supply trade sanctions by Russia and the EU lifting its dairy quota.Grant Robertson: In light of that answer does he further agree with the Prime Minister that “The biggest indicator you would see if there really was a long-term systemic problem would be a reduction in land prices”?Hon NATHAN GUY: Land prices as we know go up and down but the important point is that the long-term outlook for dairying is extremely positive. Just a few months ago the Labour Party was calling it a crisis in the dairy industry and actually prices are higher than when Labour was calling it a crisis.Grant Robertson: Does he now agree with the Prime Minister that there might be a systemic problem with today’s Real Estate Institute of New Zealand dairy farm price index noting a 19 percent fall in prices for dairy farmers?Hon NATHAN GUY: The dairy prices are volatile but the long-term outlook for farm prices is very strong because we have only a limited supply of land. As a result prices will go up and down. That is something that the Labour Party does not seem to understand. Land prices go up and down but the important point is that the medium to long term outlook for the dairy industry is incredibly strong. Farmers are taking a long-term view.Grant Robertson: Was the Prime Minister correct when he said: “The biggest indicator you would see if there really was a long-term systemic problem would be a reduction in land prices”?Hon NATHAN GUY: I agree with the Prime Minister’s comments but importantly what I have said is that you need to take a long-term outlook. That is why Labour day in and day out extracts a small subset of figures and gives them profile. In actual fact what the member should be doing is looking at the long-term outlook for dairying. Because we have significant free-trade deals with Asian communities and because we are supportive of the Trans-Pacific Partnership which that party will not even support which—Mr SPEAKER: Order!Hon Damien O’Connor: If global dairy trade is supposed to be global why have the seven other companies who have used the platform withdrawn leaving Fonterra as the only company trying to flog off its commodities on a Fonterra-owned but Boston-based trading platform?Mr SPEAKER: In so far as there is ministerial responsibility the Hon Nathan Guy.Hon NATHAN GUY: The Government does not have a role in deciding which companies participate on the Global Dairy Trade. That is indeed a decision for private businesses to make. For the member to stand up and say that it is all about Fonterra’s commodities well Fonterra knows that it has got challenges in front of its own business model and it needs to look at long-term value-add contracts.Rt Hon Winston Peters: Minister if the issue of trade is so important why is there a boycott to the second-biggest importer of dairy products in the world namely Russia which he goes along with as does the Prime Minister?Hon NATHAN GUY: I am surprised that the member is alluding in the House this afternoon to the fact that New Zealand should be there negotiating a free-trade agreement with Russia. That does not make sense—that does not make sense.Rt Hon Winston Peters: You were and you are. What a fool.Hon NATHAN GUY: The member should realise that just recently Fonterra has had some plants relisted into that market.Rt Hon Winston Peters: Oh! What did your Prime Minister say?Hon NATHAN GUY: The member does not seem to understand the wider geopolitical issues of right now. If the member was supportive of free-trade—Mr SPEAKER: Order! The Minister will resume his seat.