Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Bill

on behalf of the Minister of Agriculture: I move, That the Dairy Industry Restructuring (Fonterra Capital Restructuring) Amendment Bill be reported to the House by 10 November 2022, and that the committee have authority to meet at any time while the House is sitting except during oral questions, during any evening on a day in which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area, despite Standing Orders 193, 195, and 196.

It’s important that the bill proceeds quickly to give certainty to Fonterra, farmers, and the wider dairy industry. As such, it is our intention to enact this bill before the end of the year to enable Fonterra to proceed with this capital restructure as soon as possible. It will ensure all relevant regulatory changes can be made before the next dairy season, and it provides some certainty for nearly 10,000 farmer shareholders.

This bill plays an important part in the ongoing resilience and prosperity of rural New Zealand. We undertook a public consultation from April to June this year where farmer organisations, Fonterra, independent dairy processors, and other affected groups submitted on the discussion document. The consultation process was focused on the practical implications and workability of the regulatory response package.

Enacting the bill by the end of the year will require the select committee to be given a compressed deadline to consider the bill. This will be an opportunity for submissions on the bill to be considered, further to the already received submissions on the discussion document. I’m therefore proposing that the bill be referred to the Primary Production Committee, with a deadline to report the bill back to the House of Representatives by 10 November 2022.

The question is that the motion be agreed to.

Thank you, Madam Speaker. I’m happy to take a call on this, because we’re in a situation here where we have a report-back period that is significantly shorter than what would normally be the case for a piece of legislation. In this instance we’re talking only seven weeks or so, until early November, which raises some concerns around whether or not we’re going to see the depth of submissions that we might like to see.

So from a dairy farming perspective, obviously the Dairy Industry Restructuring Act is an important piece of legislation, and we’re at a stage in the dairy calendar at the moment where we’re just coming off the back of the calving season, and I do just want to acknowledge all of those wonderful farmers in the mighty Waikato who’ve put in the hard yards now for some eight or nine weeks through calving and are now finally seeing the light at the end of the tunnel. That’s a hard piece of work. They finally get a bit of a break off the back of that at this time of year, and then we are very shortly into the mating season on-farm as well. That generally, in my area, starts in that first week of October, somewhere around 7 to 10 October typically, and so then there’s another very busy period for six to eight weeks before the bulls then go out and the pressure starts to ease over the summer. That’s the typical format we see in dairying in the Waikato and there are slightly different time frames around the rest of the country based on whether they’re before or after climatically. So Southland is slightly further behind, for example.

So on that basis there’s some concern around the time frame and whether or not we’ll be able to see a sufficient range of submissions by anyone who wishes to submit, given the pressures they may be facing on-farm within their own dairy businesses through that period of time and whether or not they’ll be able to traverse fully the proposed changes in this legislation. Although at this stage the changes have been supported by 85 percent of Fonterra farmers—all those who voted in December, I believe it was, for the proposed changes to the Dairy Industry Restructuring Act—it is important that we now traverse that in more detail rather than just the vote and actually unpack that in a little bit more detail through the select committee process.

Of course, I expect other processing companies to submit on this bill, because it has significant implications for them, whether it be Open Country Dairy or Miraka or Synlait or Tatua or any number of the wonderful dairy companies that we have around New Zealand. They may all have a slightly different opinion on the relevance of this legislation and the appropriateness of it, and, of course, on the timing around that and how their business model fits within that. So on that basis, the seven-week report back that we’ve got is a very tight window of time, and we were typically expecting a number of months to be able to traverse that more fully.

Often, as I’m sure members will be aware, during that select committee process there can be requests for additional information or additional submissions from either the people who originally submitted or from other people or businesses—I use the term “person” in the context of natural persons as well as different entities within New Zealand who may wish to provide some additional context to back up a submission that’s been made by one of the other parties. Whether or not we would have the time frame to do that is seriously in question when we’re looking at a very reduced period of only seven weeks compared to the longer period we would typically have. So I think we really need to consider whether seven weeks is appropriate and whether we should be extending that longer to allow, as I say, for not only the farmers to submit but also the dairy companies.

Of course, that’s only two aspects. There could be any number of other submitters who may wish to engage on this bill, and such a tight window reduces significantly the impact to get this right. And, of course, the purpose of all of this is to ensure that we’re able to get the best piece of legislation possible to go forward for the sake of the sector, to enable them to operate within that framework as best as possible. This really is an important change that’s being proposed here. There are a number of aspects to it and a number of areas that have raised some concerns, and we’ve heard that from speakers on this side of the House. There are aspects that will need to be addressed more fully at the select committee, and we’ll be testing each of those individual concerns against the submissions made by the range of submitters.

So, again, it’s really important that we have the time frame to do that, and as we’re moving, off the back of this week, to a two-week parliamentary recess, we’re looking at only a few parliamentary sitting weeks in which to consider the bill under the proposed time frame that’s been put forward by the Minister just now. It’s a very short time frame, and I think we really do need to reconsider whether we should be pushing that further out. So I think, on that basis, I will end my contribution. Thank you.