Guy Nathan: Dairy Industry Restructuring Amendment Bill (No 2) — First Reading 
Guy Nathan: Dairy Industry Restructuring Amendment Bill (No 2) — First Reading 
[Volume:641;Page:11331] 
NATHAN GUY (National) 
: 
 Is it not interesting tonight that when we have a look at this market-by-market summary of these 11 countries that we currently have quota arrangements with we find that two of them have expired—in June and July—and have had to be extended by Order in Council? This legislation went through Cabinet I believe in May 2007—recently—and now there seems to be a mad rush does there not? Once again there is a mad rush. The Minister would have had a briefing on this when he came in when he did not even own a pair of gumboots in 2005. He would have had a briefing and he would have known that the Dairy Industry Restructuring Act was on the agenda and was coming up. The legislation went through Cabinet in May 2007. We have been asking where it has been and when it is coming to the House. Finally the bill is now here and there is a very very tight time frame on it. The Minister wants it reported back from the select committee and through the House by the end of October. We do not know how many submissions we will get. 
This is a big issue for New Zealand dairy farmers; these quota markets are worth about $50 million a year. So I cannot understand. One would have thought that if the Minister were competent this would be before Cabinet earlier than this and in the House way before now. Here we have a Minister who talks big and fails to deliver. We have seen that with the microchipping of dogs and several other things where he has failed to deliver on his promises to the rural community. 
I want to talk a little bit about the bill a little bit about the background and a little bit about what the future holds. I have talked about the 11 markets already and how it is very important that New Zealand farmers as a whole own the quota value which is worth about $50 million a year to them. This legislation will remove the export restrictions it will allow a 3-year period for quota years at a time—which I think is fundamentally very good—and it will open up these markets. 
The Hon David Carter who leads the Primary Production Committee has talked about where we expect some of the submissions to come from. I think we can expect submissions from Fonterra from Open Country Cheese and from Tatua which is a very good niche company up in the Waikato. We can expect a submission from the Westland Cooperative Dairy which is doing particularly well down on the West Coast because it has not got the big share structure overheads that Fonterra currently has. We can expect a submission from Synlait an up-and-comer in the market that I am sure will be interested in this and possibly even one from Gisborne Milk. AFFCO which has put its flag up the pole saying it is interested in getting into the dairy industry may well look to put a submission in as well. 
So I cannot understand why the Minister has taken that long to get this bill into the House. 
Hon David Carter 
: Incompetent. 
NATHAN GUY 
: I think that Mr Carter is right; the Minister is very incompetent. One of the big areas in this bill that I think we need to talk about in the first reading tonight is around the New Zealand Dairy Core Database. A significant part of this bill is around that; it is sort of hidden in there. In essence this bill will expand the regulation powers. Here I am talking about the Livestock Improvement Corporation database. If Livestock Improvement Corporation shareholders want to commercialise it then the bill will allow them to do that. I probably have a few issues about that and I will be interested to see how many submissions we get from possibly the Livestock Improvement Corporation Ambreed New Zealand and whoever else is in that market. 
The Livestock Improvement Corporation has been going for 100 years. It has been doing extremely well in innovation in terms of genetics and reproductive technologies and has been actually driving the profitability for our dairy industry. It is really important that when this bill comes to the select committee these people submit on this very very important part. The corporation does about 3.3 million inseminations a year so it is a big business. For about 80 percent of the dairy industry the corporation manages to do the inseminations into these cows. The future profitability lies in the Livestock Improvement Corporation database I believe being held by the New Zealand shareholders. The corporation has diversified into international markets as well such as Australia the United Kingdom and Ireland. It is very very important that we hear from those people who are at the coalface of the industry. 
The other thing I wanted to talk about—and Mr Carter has already touched on it as well—is how it is interesting that Fonterra has signalled an increase in payout of up to $5.56. If the dollar keeps going down that may increase even higher as well. This is fantastic for the dairy industry. But we need to be mindful of the fact that the dairy industry has been struggling for a couple of years. It has high debt and now interest rates and mortgage rates are going up. So dairy farmers have not actually seen these returns yet. 
It was so interesting when Mr Bollard came out with his statement at about the time of the Fieldays. I am sure he had had a cup of tea or coffee with the Minister of Finance who had probably told him to say: “Look the dairy industry is why we have to lift the official cash rate another 0.25 percent.” But I do not believe that statement at all. The dairy farmers have not seen that increase in payout yet and they are unlikely to see it until the end of the 2007-08 season—right through until about April or May—when this money will flow. It is estimated that about $2 billion will go through into provincial rural New Zealand. 
As we are talking about the dairy industry I will mention something that is very topical. A couple of weekends ago I was listening to the Parliamentary Commissioner for the Environment Dr Jan Wright when she was having a wide-ranging interview on Radio New Zealand National. Here she was spouting on about how the dairy industry is causing all this degradation in water quality in New Zealand. Never did she say: “These are the facts.” Never did she quote any study or any scientific research to say that dairy farming is the reason possibly for some of the water quality problems in New Zealand. So I am really interested to catch up with Ms Wright and— 
Steve Chadwick 
: She will be at our select committee tomorrow. 
NATHAN GUY 
: Well the member can ask her these questions for me: where is her scientific knowledge to say that what she said on the radio is actually correct? That is one question I would like answered. What Mrs Chadwick can say to the environment commissioner tomorrow is that dairy farmers right now are up to 97 percent of complying with nutrient budgets which is fantastic. All the time dairy farmers are very mindful that if there are environmental problems they need to change those and be mindful of the fact that we export 95 percent of what we produce in this country. A lot of it is on the back of what we have here and that is an island nation generally free of pests and all those other harmful things and we are reasonably clean and green and we are doing a pretty good job at it. Dairy farmers are very very mindful that we need to do a bit better but when the Parliamentary Commissioner for the Environment says farmers are bad and are polluting the waterways I do not think she can back that up with science. So I would appreciate catching up with Mrs Chadwick tomorrow when she has had a chance to put those questions to her. 
The other thing I want to touch on with regard to the environment is Dairy InSight which is a levy-based organisation. Farmers pay a levy into Dairy InSight which has signalled that $15 million is going into research and development on a sustainable strategy for the environment and best practice which I think is fundamentally very very good. Huge growth is happening in the dairy industry right around the country. Let us look at Southland I say to David Carter as an example which is not far from where he lives. In 1997 there were 285 dairy farms. Now there are 643 with a queue of people looking to convert. Another 50 or 60 are struggling to get builders to build cowsheds down there. It is changing the whole aspect of how Southland operates and putting more and more money into its economy which I think is fantastic. 
So in summary I cannot understand why the Minister thinks we have to have a mad rush with this bill. He has known for ages that this is coming. We have been quizzing him when he has been in front of the select committee. We have asked: “Where is the bill? When are you going to bring it into the House? When can we start work on it?” and now it is in here with a very very tight time frame. We are expected to report back by 31 October. 
Hon Clayton Cosgrove 
: Do some work. 
NATHAN GUY 
: We do not know how many submissions we will get. 
Hon Clayton Cosgrove 
: Get up earlier then. 
NATHAN GUY 
: Mr Cosgrove chips in all the time—the little strutty rooster. If the Minister had any competence he would have had it in the House in plenty of time. [ 
Interruption 
] What would that member know about dairy farming? All he does is sit in here and interject but he does not know what he is talking about. So there is a tight time frame. The members on the other side of the House really do not know what they are talking about with this bill. At the Primary Production Committee we will do our utmost to get the bill back to the House by 31 October but we should have far more time and if the Minister was competent and we had a nice little cosy arrangement with the Labour Government then we would have had more time to work on this very important legislation.