Timely Review Of Regulated Raw Milk Criteria

NEW ZEALAND - Federated Farmers is disappointed that the Government is extending the pro-competitive triggers built into the Dairy Industry Restructuring Act (DIRA).
calendar icon 3 August 2010
clock icon 2 minute read

“I will be writing to the Minister of Agriculture to request the economic evidence supporting the pro-competitor bias in DIRA. The Government has missed an open-goal to ensure real farm gate competition in prolonging this bias towards the independents,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“What the Government is doing is retarding business decisions that will be not only good for farmers, but the New Zealand economy. Before DIRA’s sunset, independents have a regulated hand-up to effectively 20 percent market share.

“I think having Singaporean, Russian and once the regulatory hoops are cleared, Chinese participation in milk processing, proves New Zealand isn’t the closed shop US dairy lobbyists believe.

“Yet it’s the Raw Milk Regulations within the DIRA that gets up the nose of farmers by taking their hard work and giving it almost at cost to someone else. While we welcome a review of regulated raw milk criteria, it’s another to ensure the review translates into reform.

“Federated Farmers believes MAF’s proposed annual regulated raw milk auction under a ‘take or pay’ basis provides a sensible all-round solution. It is the best use for the 600 million litres of milk Fonterra is obligated to make available under the DIRA.

“Yet reform should be about focusing these entrants on developing the full system from the farm through to end consumer.

“Because the current regulated raw milk criteria is completely open-ended it has effectively become a subsidy. Fonterra’s efficiency is being compromised to the benefit of its competitors and to the disbenefit of Fonterra’s farmer-shareholders and all New Zealanders.

“Federated Farmers believes in competition but ‘dial a tanker’ after forward planning places little incentive on these start-ups and processors to secure their own total and sustainable supply.

“We want to focus the minds of those seeking regulated milk under DIRA’s regulated raw milk criteria on the long term - ensuring they become strong and viable commercial enterprises,” Mr McKenzie concluded.

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