Raw milk sup­ply rules to be re­viewed

South Waikato News - - RURAL DELIVERY -

The days of Fon­terra be­ing forced to sup­ply milk to com­peti­tors such as the planned milk pow­der plant at Ara­puni could be num­bered.

The Govern­ment will start a full re­view of its raw milk reg­u­la­tions in March, in­clud­ing the re­quire­ment for Fon­terra to sup­ply milk to other dairy com­pa­nies.

The reg­u­la­tions are a key part of the Dairy In­dus­try Re­struc­tur­ing Act (DIRA), passed nearly 10 years ago to en­able the cre­ation of Fon­terra from a huge in­dus- try merger. At that time, Fon­terra con­trolled 96 per cent of the coun­try’s raw milk. To­day that has been re­duced to 92 per cent by new – but still com­par­a­tively tiny – milk pro­ces­sors.

The reg­u­la­tions, which in­clude an obli­ga­tion for Fon­terra to sup­ply com­peti­tors with up to 50 mil­lion litres of milk each a year, were in­tended to fos­ter com­pe­ti­tion for the do­mes­tic con­sumer mar­ket and en­sure farm­ers had a choice of sup­ply com­pany.

But to­day sev­eral of the new pro­ces­sors are buy­ing the reg­u­lated Fon­terra milk while com­pet­ing with Fon­terra in ex­port mar­kets.

Some of these com­pa­nies have their own farmer sup­pli­ers, a fact that irks Fon­terra lead­ers.

Agri­cul­ture Min­is­ter David Carter, when an­nounc­ing in Au­gust the Govern­ment’s de­ci­sion to ex­tend DIRA to keep the reins on Fon­terra, said the el­i­gi­bil­ity cri­te­ria for ac­cess­ing reg­u­lated milk would be re­viewed late next year.

How­ever, he said a full re­view of the reg­u­la­tions would be un­der­taken by the Min­istry of Agri­cul­ture in March.

Dav’id – Agri­cul­ture Min­is­ter


‘‘ It has been 10 years since the DIRA was in­tro­duced and over this time the dairy in­dus­try has evolved sig­nif­i­cantly. It is now ap­pro­pri­ate to re­view the raw milk reg­u­la­tions to en­sure that they re­main fit for pur­pose,’’ he said.

‘‘This is likely to con­sider more than just the el­i­gi­bil­ity cri­te­ria and in­clude the whole range of pro- vi­sions un­der reg­u­la­tions.’’

Fon­terra chief ex­ec­u­tive An­drew Fer­rier wel­comed the an­nounce­ment.

‘‘The dairy in­dus­try has moved on since the reg­u­la­tions were put in place . . . .and we are look­ing for­ward to par­tic­i­pat­ing in the re­view.’’

Mr Carter said all in­ter­ested par­ties would get their say as part of the re­view con­sul­ta­tion process. If sub­stan­tial change was pro­posed, this would re­quire new leg­is­la­tion which a se­lect com­mit­tee would con­sider.

He doubted the re­view would be com­pleted in time for the 2011-2012 dairy sea­son. stuff.co.nz


MILK RIGHTS: The rules re­quir­ing Fon­terra to sup­ply milk to com­peti­tors may be changed.

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