Choudhary Ashraf: Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill — Second Reading In Committee Third Reading 
Choudhary Ashraf: Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill — Second Reading In Committee Third Reading 
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Dr ASHRAF CHOUDHARY (Labour) 
: 
 I rise to support the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill. In saying so I am delighted to acknowledge my colleagues in the Primary Production Committee. The select committee is chaired by Shane Ardern and I must say that he does a good job. 
Hon Damien O’Connor 
: He should be the Minister. 
Dr ASHRAF CHOUDHARY 
: Indeed Damien O’Connor took the words from my mouth. Shane Ardern should have been the Minister of Agriculture because he does a good job on the committee and I thank him for that. 
In talking about this bill I will say a few words about the dairy industry. The white gold that we have in New Zealand is well known around the world where as has been said before Fonterra exports 80 percent of our milk. We earn about 25 percent of our export income from the export of dairy products including milk which are very well known around the world. The main purpose of this bill is to replace the current regulated pricing formula that we use with a new formula which will include 10c per kilogram milksolids. This bill will also allow an auction system to be put in place in the future. 
John Hayes 
: An auction system for visas? 
Dr ASHRAF CHOUDHARY 
: I will leave the member’s comment there. We are talking about 600 million litres of milk or 5 percent of our total milk for auction. The key thing is that the new regulations allow for fair and efficient pricing for regulated raw milk and they ensure that the excess demand for regulated raw milk is managed efficiently. The regulations also remove any uncertainty from market conditions for people who are suppliers particularly for those who process the milk. So it is important that the regulations are upgraded for the future of our dairy industry. 
The committee received 11 submissions on this bill and we heard nine of them. Of course many of them supported this bill. However there were some small players in the processing area who did not quite agree and were not quite happy with this bill. In particular Green Valley thought that the proposed auction system would create ambiguity in the milk market and was not sure what would happen. It was concerned about the impact of the auction system on the price paid for milk and also about a possible increase in risk for independent processors and local market operators. Clearly Green Valley was a bit concerned about the impact of the auction system. Similarly Cadbury’s had some concern. It thought that the auction system may not be equitable for all the players and it wanted the opportunity to have input into the consultation process. 
This bill is supposed to become an Act by tomorrow—by 1 April— 
Colin King 
: In 2 days’ time. 
Dr ASHRAF CHOUDHARY 
: Of course yes the date here in Parliament under urgency is a couple of days ago but this bill is supposed to become an Act on 1 April. In a way it shows that this is a lazy Government. It has left it until the very last moment to pass this bill under urgency at midnight tonight. 
This is a useful bill for the industry to ensure that we have a fair and equitable system particularly for the auction of 600 million litres of milk. Fonterra and Federated Farmers supported this bill. On this side of the House we are delighted to support the bill going forward given that our dairy industry is well known around the world and we are the largest exporter of milk and milk products. At the same time the other day we were talking about the perception of dairying when we discussed the Animal Welfare Amendment Bill. We have to make sure that our dairy industry is well perceived around the world including potential news about the treatment of animals. We talked about cruelty to animals. We must make sure that those issues are dealt with properly and in time. This industry is a major source of income for New Zealanders—25 percent of our income comes from dairy industry exports—and we have to make sure that overseas markets perceive the industry here to be clean and green and that potential issues of dirty dairying and animal welfare are dealt with before any bad news gets out to the market. 
The food safety issue is particularly important. It is important that in relation to our food safety regulations around the manufacture of foods particularly in the dairy industry and the meat industry importing countries are sure about the quality and safety of the product they are receiving. We have heard about some of the issues such as melamine in China and similar problems. They are not good news for New Zealand. We need to make sure that the milk products we export are well regarded and continue to be well regarded for the future of this country. 
As an agricultural scientist I can foresee the markets gaining a big momentum particularly in China and elsewhere in Asia. We will soon have a free-trade agreement with Hong Kong and other countries. We are in the process of it right now. In my view the dairy industry is the industry that we have to protect and enhance particularly in relation to research and development. Unfortunately when this Government came in it scrapped the Fast Forward fund we had for research and development. 
Colin King 
: Be constructive. 
Dr ASHRAF CHOUDHARY 
: No I have to be honest about that. I think that this Government has taken a very short-term view on research and development. The $700 million we had put in that fund was money allocated for research and development particularly in pastoral farming. I think we need to invest a lot more money into pastoral farming because our future is dependent on the goal I mentioned. I think that the farmers on the other side of the House members like Shane Ardern understand that. Unfortunately another MP has been a bit of a disappointment. Phil Heatley was one of our students at Massey University but he has been a disappointment. With those few words I commend this bill to the House.