Kuriger BarbaraBARBARA KURIGER (National—Taranaki - King Country): Thank you Madam Speaker. Tonight as we're standing in the House discussing the Dairy Industry Restructuring Amendment Bill (No 3) I'd just like to make a mention of the dairy farmers out there who are in the various stages of starting their calving season. I just want to wish them all the best. It's been quite a tough season for many with droughts and now a number of them are under water. So I just hope that the rest of the calving season goes really well. It's been a really interesting year for farmers and it's surprising how often in the last few months since COVID hit that we all of a sudden hear about agriculture being the backbone of the economy. It's not actually news to some of us because that's always been the case. In terms of the bill 19 years ago—actually at the time I was on the Fonterra Shareholders' Council—was when the Dairy Industry Restructuring Act came into place. It was very crucial at that time. We'd had so many mergers in the industry. What it did was it allowed the two major companies in New Zealand to form one which gave them a 96 percent monopoly. So there was certainly some grounded fear that this was the only way to bring it together to have some rules and some mechanisms and some protections in place to ensure that the monopoly didn't abuse its power. If we look today it's down to about 80 to 81 percent and in some parts of the country it's certainly met the requirements that were in the Dairy Industry Restructuring Act initially that would unleash it.This bill and the second reading here tonight is part of that process of unleashing because Fonterra needs to be in a position to make some really good commercial decisions. I find that as a cooperative when it makes bad decisions everybody jumps on it but when it's trying to make good decisions it's restricted by some of the rules that currently sit in the Dairy Industry Restructuring Act. We've had people referring tonight about the stainless steel and about the building of plants and all of that sort of stuff. When you think that a cooperative the size that it is is restricted from turning away milk supply and it can't make its own commercial decisions then it really is restricting the company in making good decisions. The other thing that's a bit hard about this is that a lot of the smaller companies that are coming into New Zealand and are setting up in competition with Fonterra have a level of foreign ownership with them and quite a level of foreign ownership with them. The National Party is not concerned about foreign investment per se but actually you have to have it on a level playing field and the problem is the Dairy Industry Restructuring Act hasn't been providing that level playing field. When we look at this bill it talks about in my notes here a start and stop supplying to Fonterra. I would turn that around and say actually it was stop and start. The thing that got to most farmers was that you could leave Fonterra if you wished but they had to take you back any time that you wish to come back. Those who were left holding the baby so to speak and those loyal shareholders who stayed in the company were quite miffed about that whole open entry and exit clause. They're not worried about the exit clause. If people choose to go then that's a personal freedom and a choice. But if a shareholder decides they're going to leave Fonterra and they always know that there's the safety net of the door being open on the way back in they're going to take much more freer choices about how they come and go. I also would note that it wasn't only the Dairy Industry Restructuring Act that did force Fonterra. It was under those constraints but for a long period of time we did hear a lot of you know We want more milk more milk more milk". That's going back in the early stages. There's a lot more questions being asked about that now in terms of the environmental part of it. The one thing that I'm not sure about—and we had lots of discussions about this as a committee and I will say I wasn't permanently on the Primary Production Committee at this stage but I did actually sit in a few times—was around the Government members sitting on the milk pricing panel. I know that there's so many checks and balances in that milk pricing panel that I'm not sure that that's overly useful or effective but it's not something that's going to drive us towards voting against the bill.One thing that I'm disappointed about standing here tonight—because I did sit in the committee for quite a period of time and we went round and round trying to get a piece in this bill that supported new entrants and gave an intent or gave a construct for Fonterra not to be able to turn away those brand new entrants to the industry. It was quite a difficult thing and we sent the bill back to see if we could create some wording around that intent or some sort of clause in here. I'm kind of disappointed that at this point of time in the second reading I'd still like to see something a bit more concrete that really supports the new entrants into this industry. I also see as part of this bill this bill gives Fonterra the right to cancel a farmer's milk supply on animal welfare and environmental grounds. This does make practical sense and I see no reason why this bill shouldn't do this but where I do get concerned is that this needs to actually be operationally fit for purpose within Fonterra. I think right now the early response service that Fonterra operates in part needs a complete review because Fonterra currently have terms and conditions of supply and they don't always use that in a way that protects animal welfare. So I think we need to have some really good discussions around how this will operationally work because I cannot see any practical reason why we wouldn't do it other than it needs to be up and running and running correctly and properly so it services all farmers and it services the animal welfare and the environment at the same time. So I remember speaking on this bill last time and I do remember James Shaw pointing out that actually the force in this bill to take all milk was one of those things that could potentially have a detrimental effect on the environment. We largely agreed on that point because it's really good to see that there's no force in here to be able to take conversions from places where it doesn't make sense. Of course this is all backed up as well by the ability for farmers to get resource consents anyway. So if Fonterra was willing to take a farm but then a farmer couldn't get a resource consent around water effluent and all of those sorts of conditions then they wouldn't be able to operate a dairy farm in the first place. So despite the reduced market share in Fonterra it still is a pretty significant power and I don't think that we should ever back away or be frightened of and ashamed of the fact that 80 percent of the cooperative of New Zealand dairy farmers want to supply that cooperative. Our competitors are out in the world and we have to stick together and we have to have some sort of global scale. I think this bill is a really good move in just taking some of the tensions away around that open entry. But long may Fonterra continue to be a really solid large main player in New Zealand—something that we can all be proud of. It's been a real pleasure to speak on the second reading of this bill tonight and I look forward to the committee stage and the third reading later on. Thank you."