King Colin: Meat Board Amendment Bill — First Reading 
King Colin: Meat Board Amendment Bill — First Reading 
[Volume:630;Page:2372] 
COLIN KING (National—Kaikoura) 
: 
 I rise in support of this bill. I would imagine that in the first instance many in the House might consider that I rise to declare of a conflict of interest. However when I was elected to this position as the member for Kaikoura I resigned my position on the Meat Board and therefore congratulate my successor in the northern South Island ward Andrew Fox a farmer from Scargill. He will do a wonderful job and he will have some interesting challenges ahead of him having been a serving director of PPCS. 
Given that we are talking about the Meat Board Amendment Bill I point out that at this particular time farmers are probably more interested in how the ram is joining with the ewes and what sort of lambing percentage they will have and they are still smarting over the fact that the Government decided there would be a microchipping process for all working dogs. Interestingly for 5 years now where I come from in Marlborough the council has been running two categories of dogs. It has a category for working dogs numbering 2500 and it has a category for non-working dogs numbering 6500. To register a working dog costs $15 and to register a non-working dog costs $45 representing the number of times the dog pound has been used by non-working dogs. There were 192 occasions in the last 12 months none of which were working dogs. 
I will get back to the Meat Board Amendment Bill. It is technical in the sense that the word “ambiguity” has been used. I would prefer to use the word “clarify” to reinforce the express purpose. 
When we talk about these details it has to be borne in mind that there is a huge history behind this quota management mechanism. A lot of it started as far back as 1882—when Mount Tarawera was blowing up—with the first shipment out of Port Chalmers of frozen meat. What grew out of that was a relationship that connected New Zealand to England because we were able to supply frozen meat which was very innovative at the time on the shoulders of and out of season to the lamb crop and meat crop over in the UK in the northern hemisphere. That being the case we built up a market because in fact we were complementing the existing home market by being able to supply lamb all year round. So that started way back in 1882. It was actually a wonderful thing for the sheep industry because up until that stage it was purely reliant on wool and rendering down the tallow of sheep. That shipment going out of Port Chalmers was a marked leap forward for the economy of this country. 
The Meat Board does not have all that long a history but it has quite a chequered history in the sense that at one stage about 1985 it marketed in a single-desk manner everything to do with meat in New Zealand. It was an abysmal failure and we have heard from other speakers today that the industry itself was controlled from England and there was no New Zealand ownership. Even what New Zealand ownership eventuated in the early stages was particularly shaky. We think of the Waitaki situation that occurred post-1985 and how the farmers had to put their hands back in their pockets again to put together models and structures of companies that would serve their interests best. They succeeded hugely especially in the South Island where they put together cooperatives in which farmers are shareholders and are able to capture value back to themselves. So successful have been the South Island cooperatives that when we look around today we see that one meat company PPCS owns 52 percent of the meat industry. It has paid for that with shareholders’ money and it is doing remarkably well. It is still capturing value back to itself. It was interesting that the Maori Party speaker talked about the business that was done by a group of Maori in taking over 16 percent of Richmond shares and selling them on to PPCS. I would say that that was the winning of the battle for control of Richmond by PPCS. So that is just of historical interest. 
Moving forward I just want to draw members’ attention to the Bills Digest that we were given. It concerns me a little bit that when we look under the heading “New Zealand Meat Board” in the “Background” section we see that it talks about participants in the meat export industry—as my learned friend Shane Ardern refers to 32000 meat producers. Well that is pretty comfortable. I have to take exception though with the mechanism that it states the Meat Board is actually funded by. It states that the board is funded by a levy on stock numbers slaughtered. In broad terms one could just about let that pass but it is not factually correct. The management of the quotas—the quota allocation system—is paid for by those participants who actually operate and move that meat over to the European or US markets. So I would like to see that corrected. I am sure the Meat Board would be horrified to think that it is still spending farmers’ money in managing the quota and I am sure that Federated Farmers’ Meat and Fibre Producers’ Council Chairman Ian Corney would be surprised to see that the Bills Digest actually says that when in actual fact he has been beavering away over the last 2 years to ensure that the meat companies actually pay their share in administering that quota. So let us just bear that in mind and look for some correction. 
I will mention two very important dates. In 1997 there was the move to put some controls management and accountabilities back on the Meat Board so in fact there was more attention given to what farmers’ and the industry’s expectations were. At that particular time the board was reinforced; it stopped being a producer board and actually became an industry board. That is when we got meat industry directors around the table. I believe that that was a very smart move because unless the industry is running in tandem with the producers there is no way to ever be sure that the best value is effectively being captured for the product in the quota market to be brought back to this country. So that has been very good. 
Where are we today? Well the 2004 Meat Board Act has been enacted and we are back here again to clarify some of the details. Anything that comes out of this process will not be changing anything because it is not broken. The process that has been run does have a new-entrance allocation situation. It has very very strict criteria for new entrance. My advice for people going into the meat industry is that instead of trying to get a minute or minuscule part of the quota they should get their mates together put their hands in their pockets flesh out the millions of dollars and buy an existing business because to actually gain significantly out of the new-entrance allocation is very hard—although in saying that I have to pay tribute to a particular individual inside the Meat Board who is about to retire Graeme Harrison. He put together and built up a remarkable organisation that is now called Anzco Foods Group. He benefited to use his own words greatly from the assistance of the new-entrance allocation aspect of it. 
I do not find that we will have too many difficulties working with this process. I welcome it as did the Meat Board itself when it heard that this bill had come before the House. I believe it took the board by surprise as well. A point we want to bear in mind is that the Crown owns the quota. Companies do not own the quota. A unique aspect of our quota into the European Union—there are 1200 quotas into the European Union—is that we manage them within New Zealand and on that basis we are able to capture the quota rent back to the New Zealand farmer industry and nation as a whole. Studies done at Lincoln University have established that the value of that quota is in the region of some $300 million annually. So it is very important that whatever we do we do it in a very level-handed manner and welcome people’s opinions. 
I am perfectly relaxed to see what does come out as a result of the process of this bill going to the Primary Production Committee. Having been a shearer and the son of a meatworker I am truly honoured to be on the Primary Production Committee and I am grateful for this opportunity to speak in support of the Meat Board Amendment Bill. 
Bill read a first time.