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The Fonterra Shareholders’ Council, which speaks for Fonterra’s 10,500 farmer-shareholders, has announced it cannot support the Government’s Dairy Industry Restructuring Bill as it is currently written.
Chairman Simon Couper, says this is consistent with the council’s submissions to MAF and the Government over the last year.
“Hidden in this Bill are provisions concerning the farmgate Milk Price that, over time, run the risk of disintegrating New Zealand’s biggest, most successful and most important export industry,” Couper says.
“The Bill has nothing to do with the retail price of milk – prices that many farmers agree are too high, with many retailers charging four times what farmers are paid.
“Instead, the Bill is about government-regulated committees determining how much farmers will earn from Fonterra’s overall business, 95% of which is exported and which is universally agreed to be the most efficient dairy industry in the world.
“We haven’t seen that sort of thing in New Zealand since the 1970s and no one will increase their investment in an industry at risk of such government intervention.
“All New Zealanders would be rightly outraged if the Government set up committees to determine their incomes, especially if that would do nothing to reduce prices in New Zealand supermarkets, and that is what dairy farmers feel is happening to us.
“As Federated Farmers said quite rightly on Tuesday, this Bill risks shooting Fonterra in the foot and we cannot support it as written.
“In the past, dairy farmers, including even a current National MP, have driven tractors up the steps of Parliament on important policy issues.
“While we don’t condone tactics like that, National MPs and Act Leader John Banks need to know that this is a much bigger issue and a much bigger threat to the dairy industry than the one that led to that protest.
“While some parts of this Bill have been welcomed, the provisions on how farmers’ incomes are to be regulated risk doing irreparable harm to New Zealand’s export effort and need to be axed.”
OPINION: There is zero chance that someone who joined Fonterra as a lobbyist, then served as a general manager of Fonterra's nutrient management programme, and sat on the board of Export NZ, a division of lobbyist group Business New Zealand, doesn't understand that local butter (and milk and cheese) prices are set by the international commodity price.
Kiwis love their butter, and that's great because New Zealand produces some of the best butter in the world. But when the price of butter goes up, it's tough for some, particularly when many other grocery staples have also gone up and the heat goes on co-operative Fonterra, the country's main butter maker. Here the co-op explains why butter prices are so high right now.
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