Kuriger Barbara; O'Connor DamienParts 1 and 2 Schedules 1 and 2 and clauses 1 to 3BARBARA KURIGER (National—Taranaki - King Country): Just a couple of questions for the Minister in the chair the Hon Damien O'Connor on the way through in this committee stage and one of them is a question around the person who is deemed to be put on the milk price committee. I just have some questions around that person and to how the Minister sees that role being enacted; and secondly does that person have deemed director responsibilities?Hon DAMIEN O'CONNOR (Minister of Agriculture): Thank you Madam Chair. I'm happy to answer any questions that come from the committee. Can I just say up front look I appreciate the process through the select committee and after the select committee actually dealing with parties to get general consensus on the passage of this dairy industry restructuring legislation.On the milk price panel there is a view that it needs to be more robust and more independent. I guess the view and the—I guess—suspicion of independents is that it has been driven very much by Fonterra influence. I think it's important both for Fonterra and for the whole dairy industry and for the milk price that there is a clear understanding that there is an independent who will be appointed by the Minister who has obligation to the process first and foremost. That is to just ensure that the information brought to the panel is considered objectively and the process of consideration—not to determine what the outcome is. That is indeed for the panel but having a clear independent appointed by the Minister I think will give some reassurance to everyone across the dairy industry.BARBARA KURIGER (National—Taranaki - King Country): Thank you. So now on that note—because you know we do need some protections around a number of things I think. My next question is—in this bill there is a clause which helps Fonterra to be able to refuse a farmer if there's an issue of environment or animal welfare. Now I'm just wondering what protections there might be in there for farmers if Fonterra get something wrong and also you know if there's an element of Fonterra making a mistake around that issue what protections there are for farmers because a mistake can easily be made.Hon DAMIEN O'CONNOR (Minister of Agriculture): This piece of legislation doesn't provide a legal process for review or redress but of course through normal commerce law contractual law of course there will be the right of any farmer to go and challenge a determination. While the bill does give Fonterra discretion then clearly the discretion as laid out in—in terms of environmental judgment then there would be a process through normal courts of law and contract law for a farmer to challenge that. I appreciate that it may not be clear enough for people. We are offering Fonterra an opportunity to exercise discretion but we expect that they would do that in all fairness to everyone involved. They are still a dominant player in the dairy industry. Independent companies have come to me and they are not entirely comfortable with the passage of this the Supplementary Order Paper 547 that effectively removes open entry because that enabled an insurance policy for farmers who would opt to supply the independents and then had the option to come back. They are fearful that Fonterra through this legislation may I guess exercise its dominant position be a bully. We—that is Parliament—will always be keeping an eye on Fonterra. I think it's important that we state that clearly. They are an entity of legislation that—nowhere else in our economy would we allow a player to be 80 percent or thereabouts of a market. As the legislation was originally designed some competitive tension is necessary and indeed for Fonterra farmers they need to have benchmarking with the independents. So we are trying to find the right balance of allowing Fonterra some discretion but then always qualifying that with oversight of normal commerce legislation and protections for anyone through our economy and commerce.BARBARA KURIGER (National—Taranaki - King Country): Thank you. A question around—so I wasn't on the committee when this legislation went through the committee but I did sit on it for a fair proportion of the time. One of the major issues we had was around—I mean I'm really comfortable with the way the open-entry thing has been dealt with but there were questions around sharemilkers and I'd just like the Minister in the chair the Hon Damien O'Connor to comment on whether he feels like—you know we tried to define what it looked like for new entrants or people who hadn't had a major share in our farming entity before because sharemilkers are the life blood of our industry and the last thing we want is for them to be blocked out.It was quite a contentious thing to try and get—you know we all agreed we wanted to do something but if you define it you start to leave somebody out. So I guess what I'm asking you Minister is do you feel that the legislation and the Supplementary Order Paper we've currently got will be—that there won't be any issues with sharemilkers in the future with regards to new entrants being able to come into Fonterra?Hon DAMIEN O'CONNOR (Minister of Agriculture): Thank you Madam Chair. I said to the Primary Production Committee when we introduced the bill that there was no clear direction from this Government as to you know what we thought was the absolute best way forward. This is a complex area trying to find the right balance between competitive pressure and not undermining you know what is our biggest investment in a New Zealand company and what is the most significant industry particularly post-COVID.And so the select committee went through that quite comprehensively and came back with a recommendation that consideration should be given for new farms for people coming into the industry. And that was a fair point. But they also—and their advice back to me said that this is a tricky area to define. We went through that with our coalition partners—New Zealand First the Greens and consultation with the National Party—and did I guess agree that the definition of a new farmer was so complex that it was likely to be gamed in the future and that we were better off through what we have come up with clearly stating in this House with the passage of this legislation that we expect that Fonterra won't unfairly block someone from coming into the industry. If they were to purchase a farm from someone who had been a supplier of Fonterra then that new farmer under what might have been the new definition that person coming in had a reasonable expectation that they would be able to continue to supply Fonterra.And that is indeed what we have come—and there's been some to-ing and fro-ing on the wording but you know the ongoing viability of that farm and what someone paid for that farm is based on a reasonable expectation that they will continue to supply Fonterra. So we I think have come to a position as best we can—and it may be challenged in the future perhaps we can't prevent that but I think we've got it about right and new people will be able to come in and if it was a dairy platform there's a reasonable expectation that of course given the conditions around environmental obligations animal welfare and all of that the person be a good farmer.