In its submission to the primary production select committee, the federation said that during the past ten years there have many court cases over the interpretation of the current DIRA Act and it wants greater clarity in the DIRA Amendment Bill.
Andrew Hoggard, representing the federation, told the committee Feds is looking to the new bill to deliver a “settled and successful industry” and the new law would not be challenged until it eventually expired or was amended.
He said the federation agrees with the Commerce Commission overseeing the act – but only if it was a true oversight and “not merely calculating something based on inputs so open to gaming as to be able to give any answer.”
Hoggard says the base price for milk is the key to a successful dairy industry. “We need to ensure the milk price is correct and a fair and accurate reflection of the value of the milk in a Fonterra farmer’s vat.
“Over the last year there have been four inquiries into the milk price with Fonterra’s competitors railing against it, as well as a series of other complaints. The milk price affects the livelihood of every farmer in the country so we need to ensure it’s not a political football any more. We need the price to be set in concrete… a fair and accurate milk price that hopefully removes all of those issues.”
Like the IDPG, Feds wants the milk price set on ‘actuals’ rather the notional efficient factory costs. “We believe we would get a lot more certainty and clarity and a lot less argument if it just used the average cost of Fonterra’s production. It’s pretty simple to calculate and generally when you keep things simple they don’t get made a mess of,” Hoggard told the committee.
In its submission the federation also made it clear their members want full ownership of Fonterra remaining in farmers’ hands. They also expressed concern at the “truncated submission and select committee process the DIRA legislation is being subjected to.”
The DIRA Bill is vital for the whole dairy industry and due consideration must be given – not submissions drawn up in haste, Feds said.
