Baldock Larry: Hop Industry Restructuring Bill — Second Reading Procedure Third Reading 
Baldock Larry: Hop Industry Restructuring Bill — Second Reading Procedure Third Reading 
[Volume:607;Page:4840] 
LARRY BALDOCK (United Future) 
: 
 I rise on behalf of United Future to support the second reading of the bill. To quote the secretary of the Hop Marketing Board: “The restructuring of the New Zealand hop industry is pretty much a non-event.” The industry has been waiting for this for 20 years. There was some initial reluctance to change as the industry growers all 26 of whom farm in the Nelson region felt that the board gave them more protection than a limited cooperative company but there is also recognition that the regulations the industry is working under are over 60 years old and are virtually unworkable in today’s climate. 
The underlying objective of the bill is to enable the hop industry to position itself so that it can respond positively to the challenges of the international market. Whereas the shrinking domestic market once sent grower after grower into the red these days about 90 percent of the annual hop crop is exported. However it is worthwhile to remember that New Zealand’s annual crop represents less than 1 percent of the global total. 
The old board structure is viewed by the industry as outmoded and even a hindrance to innovation and entrepreneurship in the industry. The reforms are similar to the deregulation that has already taken place in the apple and pear industry and the dairy industry though perhaps I should not mention those industries. The bill restructures the New Zealand Hop Marketing Board to create a cooperative company in its place known as New Zealand Hop Marketers Ltd. As a matter of interest the original marketing board was set up by a hop grower by the name of Keith Holyoake which gives us some indication of how old this marketing board must be. 
The basic day-to-day operation of the industry will not change as everything currently under the board’s control will fall under the cooperative. Shares will be allocated to growers on the basis of production rather than the current situation of one vote per grower. There will be no levies under the company. Instead voluntary charges will be used to pay for industry-good items like research which it must be said is a very innovative approach. 
The bill also liberalises the export and acquisition of hops and hop products. Under the Hop Marketing Regulations of 1939 the board is the mandatory sales agent for New Zealand hop growers. This bill removes the compulsory element and will encourage exporters to compete to export hops and hop products. Thus growers and exporters will be able to arrange their own commercial activities as they see fit since the export of hops will be part of the normal business environment. This has the advantage of removing the costs and requirements associated with the current regulatory system. 
There will be some minor transitional costs involved in the registration of the new company. However unlike the restructuring of the kiwifruit industry in 1999 the proposed restructuring of the hop industry does not require a restructuring plan or a referendum because hop producers unanimously support the proposal. This saves some costs for the board in seeking the consent of growers. 
The committee received only one submission from the board itself. Not surprisingly it was in support of the restructuring. Anyone who heard the first reading debate on this bill would have witnessed Labour and National MPs arguing about whether the Government had changed its view on the deregulation of industries like hop production. We were not disappointed today when previous speakers sought to raise this point yet again. United Future however thinks that the most important thing is to ensure that when industries seek to improve the way in which they operate they should be fully supported by the Government whatever their ideological stripe. After all that is the common-sense position. United Future supports the recommendations of the select committee and supports the second reading of this bill.