Ardern Shane: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
Ardern Shane: Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill — First Reading 
[Volume:667;Page:14508] 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 It is always interesting to follow the previous member for West Coast - Tasman Damien O’Connor particularly on dairy industry issues. In fact the member was chair of the Primary Production Committee at the time that the Dairy Industry Restructuring Act 2001 passed through that committee so I know that he knows a little bit about the detail. I also congratulate Minister Williamson on his fine contribution to the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill. I know his history is in the dairy industry as well. He grew up on a dairy farm which I know he does not really want advertised much in the heart of the Waikato and has a history there. 
The Fonterra debate is interesting and has been occurring since the time that Fonterra was formed. Fonterra is only part of the dairy industry. There are now 20 exporting companies in the industry but Fonterra is by far the most dominant player. It is responsible for 84 percent of product exported out of New Zealand—84 percent. We hear all these figures bandied around. Sometimes it is useful to have a few facts injected into the debate. Eighty-four percent of dairy product is exported out of New Zealand which is around 91 to 92 percent of total milk processed in the country. That includes the regulated milk which this legislation covers. 
The debate on raw milk is only part of the equation. The review that was announced yesterday will look at the eligibility of competitors for raw milk. That will be the interesting part of the equation going forward I guess. There is a debate and it is a legitimate one about who should be eligible to receive up to 50 million litres of raw milk delivered to their processing site in a Fonterra tanker. It is a legitimate debate. I look forward to the submission process in the Primary Production Committee when it takes place. 
Going forward if we do not protect the critical mass that Fonterra has then we are in danger of fracturing it as we see in the meat and wool industry and we are in danger of losing value. There is no doubt about that. I do not know why it is difficult to understand in this country; when we play the Springboks in rugby we send the All Blacks who are a total monopoly. There is no competition within New Zealand with the All Blacks. But when we sell cheese meat wool or products like those then we need to send the Taranaki team to sell them. That part of it is something that I have been challenged by and there has been vigorous debate over the whole time that I have been involved in this process. 
The select committee process looked at the change in the principle Act that we made recently of the farm-gate price plus 10c and a whole lot of interesting issues came up about how some of the very small entrepreneurial and sometimes unique companies in the world can be protected. This bill is designed to try to get a balance in how we provide milk to these small cottage industries although some of them are not so small. Some of them provide a very very diverse dynamic within the private capacity of their companies and also within the New Zealand dairy industry as a whole. How do we protect them so they do not get run over by a large performer and player like Fonterra at the same time as we allow Fonterra to go forth and export to 150 countries and continue to maintain a strong market branding and a strong market position? To strike that balance is challenging. 
The review that the Minister of Agriculture announced yesterday is I think very timely. It is certainly something I have pushed for for a long time. I know that those who are shareholders of Fonterra—bear in mind that there are only 10300 shareholders in Fonterra of which I am one and I declare an interest in that—at this point in time are keen to see the detail on how that raw milk competition can be fairly regulated so that they are not disadvantaged at the same time as providing that raw milk which is so necessary to some of those small companies. 
I look forward to the bill coming before the Primary Production Committee. I know most of the players who will submit to that committee and I look forward to seeing them there. I also know that the Labour Opposition is basically in support of the concept despite some of the rhetoric that we have heard from the other side of the House. I am sure that at the end of that process a sensible pragmatic approach will be found and the bill will pass through Parliament in a timely way.