Select Committee Milk Inquiry 'a parliament too early'

Federated Farmers has told the Commerce Select Committee Inquiry into milk prices, that an inquiry is premature given the work being undertaken by the Ministry of Agriculture and Forestry (MAF), Ministry of Economic Development and The Treasury.

“Unsurprisingly, Federated Farmers recommends that the inquiry find New Zealanders are not paying too much for milk relative to other countries and that our market is operating effectively,” says Willy Leferink, Federated Farmers Dairy chairperson.

“The fact is MAF, the Ministry of Economic Development and the Treasury are doing work that could vitally inform any future Select Committee. This work was started some months before the Commerce Select Committee decided to look into milk and will continue well after this Committee reports.

“For the benefit of discussion, we’re including our recently lodged submission on the MAF led review of the Raw Milk Regulations with this release.

“I guess it is a general election year, but Rugby World Cup visitors must be looking at this Inquiry with a degree of amusement.

“Federated Farmers knows there’s a huge amount interest of interest in the price of milk. This interest has come from members of the public concerned about the retail price of milk. Its also come from independent processors concerned about the price they have to pay for raw milk.

“However, our submission shows that milk isn’t some smoking gun. Despite public concern, the retail price of milk has not increased by more than many other foods, many non-food items in the consumer price index.

“The Commerce Commission has also considered this question and found that such an inquiry ‘was not warranted’.

“The Commission also noted, “it is questionable whether Fonterra has scope to exercise substantial market power in relation to the supply of raw milk to other processors. The [Raw Milk] Regulations provide an access regime for raw milk and are designed to counter Fonterra’s market power.”

“There’s also nothing stopping other processors from entering the consumer milk market.

“While we do not agree this inquiry is necessary, it gives us a chance to put some facts across from the farmer’s perspective. New Zealanders are not paying too much for milk relative to other countries and our market is operating effectively,” Mr Leferink concluded.

To download Federated Farmers Commerce Select Committee submission, click here.

To download Federated Farmers submission on the review of the Raw Milk Regulations, click here.