Norman Russel William: Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill — First Reading 
Norman Russel William: Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill — First Reading 
[Volume:658;Page:7586] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 The Green Party will be supporting the referral of the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill through to the select committee and there we will have a bit more of a look at it. The Green Party I think has an interesting relationship with Fonterra. On the one hand the Greens have been extremely critical of Fonterra’s performance in terms of its environmental impacts. Although some of the programmes that Fonterra has been running have been good overall we know that the intensification of agriculture has been driving the deterioration in water quality in our lowland rivers and now in our groundwater. That intensification is a major problem. On the other hand the Green Party also has tremendous sympathy for the cooperative structure of Fonterra. The Green Party is a big supporter of cooperative structures. We think that a producer cooperative is actually a very good model and it is most extraordinary that the largest enterprise in the New Zealand economy is in fact a producer cooperative. That is completely at odds with the laissez faire ideology that has dominated New Zealand since the mid-1980s. Fonterra has proven that the laissez faire neo-liberal ideology is wrong time and time again. 
It has been interesting for us to watch as National has attacked Fonterra time and again. Currently we see the attack on Fonterra from Open Country Cheese. That company threatens the New Zealand ownership of the dairy industry. The idea of Open Country Cheese and of a series of other companies like it is to break into the New Zealand dairy production sector and break up Fonterra. The reason that the Greens have a problem with this is that aside from the fact that Open Country Cheese is basically the “National Party Inc.”—Wyatt Creech and John Luxton were involved in setting up the company—we think that it undermines the cooperative structure whereby the producers own the industry. We are big supporters of the producers owning the industry in the dairy sector; that is tremendously important. Open Country Cheese also threatens the New Zealand ownership of the dairy sector. The cooperative structure of Fonterra means that it is very difficult for foreigners to take advantage of our almost non-existent foreign ownership laws in order to get control of one of our most important sectors. The Greens support the role of Fonterra in protecting a critical part of the New Zealand economy. 
So although we have some disagreements with Fonterra particularly around water-quality issues and agricultural intensification we are interested to make sure that this bill and other bills like it do not fundamentally threaten the cooperative structure of our dairy industry. That is why we will follow the submissions to the select committee. The cooperative structure of the industry is one of the key ways to protect New Zealand ownership. It has also been one of the key ways that we have built the dairy sector into such a productive sector of our economy. If we had not continued to support the cooperative structure and if we had just allowed a laissez faire approach to be taken which has been the ideology of both National and Labour Governments for much of the last couple of decades then we simply would not have a cooperative like Fonterra today. We would have a bunch of competing foreign-owned corporations that would not be adding much to the New Zealand economy whatsoever. The Wyatt Creech model which the National Government supports—Open Country Cheese—has been in conflict with Fonterra. It has been interesting to watch that and particularly to watch the latest labour relations episode up north. Of course lots of the local farmers had tremendous sympathy with the workers at Open Country Cheese. Local farmers have no sympathy for the Open Country Cheese corporation because it fundamentally threatens the cooperative structure of the industry. Most dairy farmers who are part of the cooperative understand that Open Country Cheese is part of the problem and have no sympathy for it whatsoever even though the National Party is in donkey deep with Open Country Cheese. 
One of the other things that I think has been quite interesting about Fonterra has been the growth of the organic milk sector. Some players that are independent of Fonterra have played an interesting role but we have also seen Fonterra play an important role in the development of the organic milk sector and in the increase in production out of organic milk. There is still a really long way to go and we certainly do not want this bill to threaten that but so far Fonterra has played a significant role in the emergence of the organic milk sector. We think that it could play a much bigger role than it does currently and we look forward to seeing Fonterra embrace the organic sector even more but none the less it has played a really important role. 
For those reasons and with those brief introductory comments I will leave it there. The only other thing I would say as the bill touches on the issue of water quality and Fonterra’s role in the agricultural sector is that it has been quite worrying to watch the Government going after water conservation orders attacking Fish and Game New Zealand and now attacking Environment Canterbury as an attempt to protect dirty dairying. The Government is basically acting in the best interests of the big irrigators rather than standing alongside the other parts of the industry. Lots of farmers inside Fonterra care deeply about water quality and are trying to do something about it to improve it whereas the Government is purely on the side of the irrigators and is trying to break water conservation orders trying to break Fish and Game New Zealand and now trying to break Environment Canterbury because it dares to stand up against the irrigators and dirty dairying. 
I think that most of the shareholders of Fonterra would like the Government to actually protect our clean green reputation which in the long run will be one of the key ways that we add value to dairy produce. By having a brand of integrity a brand that respects animal welfare and a brand that respects environmental performance as well as labour standards in the long run the value added by the dairy sector will be much higher than if New Zealand milk products are not seen as a brand of integrity. We will not have a brand of integrity if the Government of the day backs dirty dairying instead of clean dairying which is of course the policy of the current Government. In the long run that will undermine New Zealand’s image of being “100% pure and clean and green”. To me it seems quite important to support those elements in Fonterra who have a genuine interest in cleaning up the dairy sector and making sure that in the long run we have a brand of integrity with clean and green milk products coming out of New Zealand. Fonterra can play a key role in that. So the Greens will be looking at the submissions on this bill as they come into the select committee and we will be watching the issue closely. We will support the referral of the bill to the select committee.