Tuesday, 13 November 2018 10:55

DIRA out of date?

Written by  Nigel Malthus
Damien O'Connor. Damien O'Connor.

The Dairy Industry Restructuring Act (DIRA) appears to be preventing Fonterra from effectively managing some aspects of its farmers’ environmental performance, says a discussion document from MPI.

DIRA may also be no longer fit for purpose, in that it provides access to regulated milk for large dairy processors “for whom it may no longer be necessary”.

However, DIRA remains relevant and effective at achieving its core objective of managing Fonterra’s dominance, and was unlikely to be encouraging inefficient industry growth or preventing Fonterra from pursuing a value-add strategy.

MPI says those were its preliminary findings after consulting industry stakeholders in the first stage of a major review of DIRA launched in May.

Agriculture Minister Damien O’Connor released the document at a ceremony on a dairy farm at Outram, Otago, to mark the start of wider public consultation. 

O’Connor said our biggest and most important export sector must be fit for the future.

“It’s timely to take a strategic view of the challenges and opportunities facing the nearly $17 billion dairy sector.”

“A productive and sustainable dairy sector that grows value and protects the natural resources it depends upon is vital to our economic prosperity and the wellbeing of all New Zealanders.”

O’Connor said DIRA, which led to the setting up of Fonterra in 2001, regulates the co-op’s dominance in the market to protect the long-term interests of all farmers, consumers and the wider economy.

“The dairy industry was built on the back of the DIRA legislation and it is a significant driver of the industry’s performance. 

“The review is looking at open entry and exit obligations, the farmgate milk price settings, contestability for farmers’ milk, the risks and costs for the sector, and the incentives or disincentives for dairy to move to sustainable, higher-value production and processing.

“We need everyone with an interest in the success of the dairy sector to take part in a frank appraisal of the issues.” 

Public submissions are invited until February 8, 2019, after which potential legislative changes will be drawn up to go to Parliament.

The document says key legislative areas are open entry requirements, access to regulated milk for dairy processors, the base milk price calculation and the DIRA review and expiry provisions.

More like this

Fonterra vote

OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

Editorial: A new era for two co-ops

OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.

Featured

Editorial: Right call

OPINION: Public pressure has led to Canterbury Police rightly rolling back its proposed restructure that would have seen several rural police stations closed in favour of centralised hubs.

National

Machinery & Products

New McHale terra drive axle option

Well-known for its Fusion baler wrapper combination, Irish manufacturer McHale has launched an interesting option at the recent Irish Ploughing…

Amazone unveils flagship spreader

With the price of fertiliser still significantly higher than 2024, there is an increased onus on ensuring its spread accurately at…

» Latest Print Issues Online

Milking It

Fonterra vote

OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.

Follow the police beat

OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter