King Colin: Dairy Industry Restructuring Amendment Bill — Third Reading 
Text is incorporated into the Bound Volume 
King Colin: Dairy Industry Restructuring Amendment Bill — Third Reading 
[Sitting date: 24 July 2012. Volume:682;Page:3827. Text is incorporated into the Bound Volume.] 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to speak during the third reading of the Dairy Industry Restructuring Amendment Bill. In doing so I think we need to reflect ourselves and project ourselves outside this debating chamber because I sense a degree of polarising of views from the Opposition. 
When you think about Fonterra and you think about milk it is about cooperation because if you do not cooperate you do not actually have a product. When you think of Fonterra and the construct of the legislation of the Dairy Industry Restructuring Act it is obligated to take milk from where it is being produced. I might say that those people who would set themselves up and compete against Fonterra for that milk production would go to where it is the most efficient to pick up the milk in those areas like the Waikato like Canterbury where it is developing or like Southland. They would not set themselves up in Takaka or Kaikoura where there was an absence or a small number of dairy farmers. 
So I just want to set things into this context because while we consider this amendment to the Dairy Industry Restructuring Act we need to see that this is an organisation that is primarily export-focused. Although we in the House here did give it the ability to not be subject to the Commerce Commission as would be the normal practice conditions and terms inside this country it was purely driven out of the essential element that New Zealand is a nation that exports at least 85 percent if not 90 percent of what it produces. So having put that in place this amendment bill I believe is the next step and the next positive step for Fonterra because it must compete internationally and it needs to succeed for the benefit of New Zealand. Really what we are talking about here is a construct that actually uses sunlight water and the elements of the earth to produce protein and changes that protein into something that can be exported to 150 countries around the world. 
The Act was also designed to encourage contestability. That was understandable because we wanted to see a dynamic and vigorous Fonterra and this is what we do have. So we go back to those times when these issues arose around redemption risk. We have had it articulated from the chairman of the Primary Production Committee that there was a triple whammy as it were where redemption risk became quite evident and the international bankers valued that at $1 billion. One has only to stop and think what that would do to the fiscal settings and economic settings of a company to be able to conduct itself in an orderly and effective way. In talking about growth and entering other markets you can understand the dilemma that the governance structure of Fonterra would have faced. So from that point of view we want to also realise that back in 2006-08 it was the very governance structure of Fonterra that has brought it back to the situation where it is dynamic and is taking this next step. 
So without going any further this bill has been well canvassed. Trading Among Farmers is a relatively simple and straightforward exercise. The size that Fonterra specifies for this pool is somewhere in the region of 12 to 14 percent and I wish that this exercise proves very fruitful and achieves the very goals that Fonterra has set itself. If it does not there is the catch net within this piece of legislation to ensure that the status quo is enforced and that free entry and exit are maintained. I have great pleasure in supporting this bill.