Dairy Industry Restructuring

Tena koe Mr Speaker.

It is good to be able to speak to a piece of legislation in an unusual occurrence in which we all appear to agree.



When Samuel Marsden arrived in the Bay of Islands in 1814 with two cattle and a bull, he probably had no idea that less than two centuries later, the dairy sector would constitute New Zealand’s biggest industry – injecting some eight billion dollars into the economy, and constituting some twenty percent of our exports.



And as the good Reverend set about training Maori in British farming and gardening techniques – believing they would pave the way to Christianity - he would have been amazed at the dividends such skills would pay off in 2007.



Maori Dairy Sector

For the Maori dairy sector now owns over $100 million dairy shares and Māori also represent more than fifteen percent of all sheep and beef interests in Aotearoa.



Such is the context in which this Bill is being read; a Bill which allows the New Zealand Dairy Board to have the right to keep exporting to designated markets, and also allows for other dairy processors to become eligible to hold these export licenses.



The Bill consolidates the position of New Zealand in the global marketplace once more, after the expiry of dairy quota markets established under the Dairy Industry Restructuring Act 2001.



This opportunity to again secure a welcome mat to external markets is a move which the submitters and the Select Committee endorsed.



It is a move which we in the Maori Party also fully embrace.



We see that the allocation of export rights to dairy quota markets to a wider group than Fonterra, is consistent with the kaupapa of kotahitanga - the principle of unity and a purpose of direction.



Allowing for greater participation and certainty in the dairy industry is a more inclusive approach; an approach which should bring with it a wider support base amongst the industry.



Public feedback supports this claim.



The submission from Tatua Dairy Company Limited based in Tatuanui outside of Morrinsville, supported the Bill as finally enacting the goals of the Dairy Industry Restructuring Act: to maximize economic benefits to our country, arising from tariff quotas as maintained by foreign governments.



And in this regard, we know that Maori dairy farmers are ready and willing to take on the world.



Capacity of Maori dairy farmers to benefit from the Bill

They want to be poised to benefit from the widened eligibility to export rights that will be put in place by this Bill.



And just how ready they are is able to be gauged from a project which is currently collecting physical, financial and environmental data from 45 properties in the Tai Tokerau, Te Arawa, Taranaki, and Ikaroa/Rawhiti regions.



I’m very pleased to share with the House that the Maori Dairy Farmers of New Zealand have a project supported by the Ministry of Agriculture and Forestry which benchmarks Maori dairy farm physical, financial, and environmental performance.



The data will be collected for three seasons to balance the effects of climate; from across the four North Island regions.



The farms will be benchmarked for physical and financial performance as well as receiving Overseer assessments for environmental sustainability.



The farms reflect varying ownership structures from share-milking to owner-operated to Maori Incorporation owned and governed farms.



We are hopeful that through this project, Maori farming authorities (Incorporations and Trusts) will be able to realise the benefit of meaningful management and monitoring information to support their future progress and development.



The Maori Party welcomes the advances of projects such as this one, as it will lead to a strong platform from which to enter designated dairy markets which operate country-specific tariff quotas for New Zealand products.



The Bill will provide certainty for future growth of dairy industry

The Bill will also provide future certainty to the industry – and for an industry which the Livestock Improvement Corporation advises us just enjoyed in 2006/07 the most productive season on record for the New Zealand dairy industry, then such certainty is clearly a bonus.



Just to put some sort of context around this, we’re talking about 11,630 dairy herds; and a population of 3.917million cows – an increase of 84,000 on last year.



But we do note that the changes will not be without controversy, particularly associated with Fonterra Co-operative Group Ltd.



It appears that Fonterra strongly opposes removing export restrictions for Japan in the cheese market and those parts of US designated markets without provision for designated imports.



They believe that removing the restrictions risks a significant loss of value to the NZ dairy industry and economy over time.



Meanwhile other players, such as the Tatua Dairy Company have the completely opposite view – suggesting that the key thrust behind the Dairy Industry Restructuring Act of maximizing economic benefits to NZ arising from tariff quotas, will be better achieved by the removal of export restrictions allowing other companies to expand and increase their performance.



In such a view, the removal of export restrictions for cheese exports to Japan is therefore desirable.



We know that Fonterra held a round of five meetings with all of their Maori Shareholders in the last week of November, and so we are hopeful that if Maori had a view about the maintenance of tariff quotas that it would have been raised in these hui.

We are all awaiting too, the results of these hui, as we are keen to hear from whanau, hapu and iwi their thoughts, about the selling off of Fonterra shares to the overseas market.

We have, as the Maori Party, always believed that farmers must keep control of this industry – and as such, the proposal to sell off interests to external markets leaves us with considerable room for concern.

It is the farmers who own the shares now, who have put the hard work in for the production of milk, and who have tilled the land, that require all of our support.

We would be concerned if overseas investors took control over an industry which is so crucial to the future prosperity of this country.



And so, while we support the general intentions of this Bill in opening up the market, allowing for greater participation and certainty in the dairy industry, we are, if you like, alert to the possibility of the inevitable issues around control that come when overseas investors raise interest in our land.

Na reira, tena koutou.