NZ dairy industry under review

07 Nov, 2018 04:00 AM
Comments
0
 
The question of whether Fonterra should have to collect milk from every new entrant into the dairy industry in New Zealand is raised in the discussion paper.
The growth of the (NZ) dairy industry has had negative effects on our environment.
The question of whether Fonterra should have to collect milk from every new entrant into the dairy industry in New Zealand is raised in the discussion paper.

A New Zealand Government discussion paper on the future of the dairy industry says most of the rules governing it are still relevant but change is on the horizon.

NZ Primary Industries opposition spokesman Nathan Guy said it while it was a wide-ranging review, it would not be the last word on the matter.

"We'll be talking about DIRA for another 12 months and the true politics will be played out in Cabinet," he said.

"Shane Jones (Minister for Infrastructure, Forestry and Regional Economic Development) has openly talked about splitting Fonterra apart.

"There's nothing specific in this document about splitting it but that's where the Government may want to take it."

The discussion document on the Dairy Industry Restructuring Act has found:

  • DIRA is still effective at managing Fonterra's dominance.
  • It does not encourage inefficient industry growth or prevent Fonterra from pursuing a value-add strategy.
  • But it prevents Fonterra from managing farmers' environmental performance.
  • Provides access to regulated milk for large dairy processors for whom it may no longer be necessary.
  • DIRA was instrumental in the creation of Fonterra in 2001 and continues to ensure the dairy giant does not take advantage of its market dominant position.

    When it was set up Fonterra had 96 per cent market share but that has fallen to 80.5 per cent.

    Minister of Agriculture Damien O'Connor said that while dairy growth had been good for the economy, with dairy export receipts more than doubling in value since 2001, there had been a downside.

    "The growth of the (NZ) dairy industry has had negative effects on our environment, through increased greenhouse gas emissions, nitrate leaching, and the expansion of dairy into increasingly marginal land areas," he said.

    One of the contentious issues facing the industry is the question of open entry, whereby Fonterra has to accept all applications by dairy farmers to become shareholders.

    The discussion paper offers three options: the status quo, a repeal of open entry, or amending it so Fonterra could reject an application to become a shareholder if the applicant was unlikely to comply with its terms of supply.

    These terms could range from environmental (including climate change) impact of the production of milk, health and safety, animal welfare, or hygiene.

    It also looks at the issue of whether Fonterra should continue to be required to sell up to 50 million litres of raw milk per season to all dairy processors, and whether Goodman Fielder would continue to be able to buy up to 250 million litres of raw milk per season from Fonterra on regulated terms.

    Originally it had been expected Goodman Fielder - the major domestic competitor for Fonterra - would have obtained its own source of milk over time, but this has not happened.

    The paper said environmental regulations had not significantly constrained the growth in dairying, which had increased pressures on the environment.

    The resulting impacts had not been borne by farmers or dairy companies, but by society as a whole.

    Fonterra said in a statement that DIRA was a complex piece of legislation and it was important to New Zealand that the review was thorough.

    The deadline for submissions on the paper are February 8, with final recommendations to the Government in April, followed by law changes late next year.

    Page:
    1

    POST A COMMENT


    Screen name *
    Email address *
    Remember me?
    Comment *
     
    Using an alternative plant type like plantain in grazed pastures could help lower a farm's greenhouse gas emissions, AgResearch scientists in New Zealand have found.
10:39 AM Using an alternative plant type like plantain in grazed pastures could help lower a farm's greenhouse gas emissions,...
    Over summer in south-eastern Australia, with limited rainfall on rain-fed areas of the farm, leaf emergence rates slow, pasture growth rates decline and there is increased grazing pressure on any irrigated areas of the farm. 
23 Mar 19 Over summer in south-eastern Australia, with limited rainfall on rain-fed areas of the farm, leaf emergence rates...
    light grey arrow
    The $1 a litre milk has already forced closure of numerous dairy farms. Lion Dairy & Drinks
    light grey arrow
    ABOUT TIME SOMEONE REALISED THE MILK INDUSTRY IS NEAR EXTINCT. tO PRODUCE MILK COSTS MONEY MUCH
    light grey arrow
    Hello Frank, I suspect that the air entry problems I have experienced in silage bales over the
    MASTITIS management is highly effective but far from conventional for Tasmanian dairy farm manager Richard Hori. That's no surprise given the herd is milked through a robotic dairy.
23 Jan 19 MASTITIS management is highly effective but far from conventional for Tasmanian dairy farm manager Richard Hori....
    Spending $2.7million to build a new dairy is part of a rolling upgrade and improvement plan for VAN Dairy Group, located at Cape Grim, Tasmania.29 Dec 18 Spending $2.7million to build a new dairy is part of a rolling upgrade and improvement plan for VAN Dairy Group,...
    Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
    Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.