30 Mar 2012

Dairy restructuring legislation prompts farmer worries

1:24 pm on 30 March 2012

Disquiet is growing among Fonterra's farmer shareholders and some political parties about the Dairy Industry Restructuring Amendment Bill which the Government introduced this week.

The farmer shareholders say they could not support the bill in its present form and have called for changes.

The bill would embed Fonterra's farm gate milk price setting system into legislation and require it to be monitored by the Commerce Commission.

It also paves the way for Fonterra to introduce its plan to allow farmers to trade shares.

The Fonterra Shareholders' Council, which represents its farmer suppliers, is concerned about provisions in the bill covering the milk pricing process, as well as trading amongst farmers.

It says the bill would allow government regulated committees to decide how much farmers will earn and that's not acceptable.

Labour Party primary industries spokesperson Damien O'Connor is also urging the Government to go back to the drawing board.

He says the party has concerns about aspects of the milk price panel and how its oversight will occur.

Mr O'Connor says the existing dairy legislation was achieved through political consensus and the new bill needs to be redrafted to continue that bipartisan approach.

Green Party agriculture spokesperson Steffan Browning says it has concerns about trading amongst farmers, saying it may undermine the structure and integrity of Fonterra.

The Government aims to have the first reading of the Dairy Restructuring Bill next week.