DAIRY NEWS APRIL 9, 2019
4 // NEWS
DIRA changes ‘won’t be radical’ WESTLAND SALE A WORRY FOR O’CONNOR
PAM TIPA pamelat@ruralnews.co.nz
THE REFORM of the the Dairy Industry Restructuring Act (DIRA) need not be radical but there will be some changes, Agriculture Minister Damien O’Connor has indicated. “Fonterra is the biggest and best company we have in this country and the DIRA review underway is a really important one,” he told the Northland Dairy Development Trust annual general meeting. He spoke via Skype. The previous government had done a review and almost got to the point of passing legislation but “chickened out at the last minute” so the review was left ‘sitting on the table’ during the last election, he said. “I have taken... a fresh look at everything in dairy and how DIRA affects both Fonterra and the wider consumer and international market. “We are [near to] getting feedback and advice from officials [who have]
Agriculture Minister Damien O’Connor says there won’t be a radical reform of DIRA.
listened to people all over the country. I’d say it is balanced feedback and we will be making decisions on what that might mean. “Key issues are open entry, open exit and then the provision of milk for competing companies and how to set the milk price. “I am not convinced there needs to be radical reform but there needs to be change [to protect] Fonterra’s position as the biggest company we have on the international market [and to pro-
tect] farmers’ rights [and ensure] that consumers are getting a fair go. “You will certainly hear about it and have an opportunity to submit on the changes when we decide the direction of travel in that area.” O’Connor spoke by Skype because Parliament was reaching the final stages of the Budget process in which some of his bids for funding were under discussion. He said the result was positive and told farmers “hope-
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farm management plan that would help farmers to meet all the basic requirements imposed by regional councils on nitrate leaching, water quality, water safety and biosecurity. “And there are many other issues -- you would say burdensome or challenging issues -- in being farmers in a new and emerging international environment”. O’Connor says he knows farmers’ concerns about regulation
and pending legislation. “We don’t want to impose anything we don’t think is absolutely necessary. [But] international trends mean consumers want to know more about where their food comes from and the ones who can afford to pay for our high value products want to know that we are doing everything in an ethi-
cal and sustainable way.” Hence the need to prove good environmental management, labour standards, animal welfare and food safety standards, he says. A lot of his efforts as minister are to get enough resources to move farming forward to meet those increasing international requirements.
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fully that will be good news for you on Budget day”. “We are rolling out a real big budget and that will not be just about the social side but the income-generation side as well -- on sustainable use of land.” Issues of water quality, land use, nitrate leaching and sustainable forestry planting are at the forefront of MPs’ thinking. Through MPI O’Connor is aiming to get a template for a
THE GOVERNMENT needs to look at the issue of foreign ownership of businesses, O’Connor says. The likelihood of the sale of New Zealand’s second-biggest dairy cooperative, Westland Milk Products, is “personally of concern for me coming from the West Coast,” he says. “But it is an indication of the level of interest in our agribusiness sector from offshore investors. “They come from all over the world. There is a large amount of money coming out of Europe that can be and is looking to buy dairy farms. And so from a Government perspective we are taking a cautious approach to ensure we have, hopefully, some control over investment in our primary sectors and the wider economy into the future. “We have made a call on farmland, and it will be very difficult for foreigners to buy that; we have made a call on houses but we have not made a call on businesses and that is one of the areas we need to look at.”
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GROWTH HAS been debated at the Fonterra board table and the directors’ view now is that the co-op will not see the huge growth of the past, says director Brent Goldsack. Environmental constraints could be the limiting factor. “Things around water and nutrients: we will get a very good handle on
that,” he told the Northland Dairy Development Trust’s annual meeting in Whangarei last week. “But as we look at gases – whether methane or nitrous oxide -- that’s much harder.” Methane may be a little easier but generally it gets harder, Goldsack said. Over 35 years production has increased three-
fold but the co-op won’t be getting that growth in the future, he says. With genetics and science he is confident farming will consistently improve. “As a board I think we are saying [growth] is probably going to be relatively flat -- certainly for the foreseeable future.” Goldsack says he is worried at the prospect of a payout of $7/kgMS or
better next year because at that price people start getting ahead of themselves and do things they later regret. “The Europeans, the Americans… they would much rather be where we are today and this is our third year in the mid $6/ kgMS. It’s been a nice spot for the co-op over the last three years.” – Pam Tipa
MIKKELSON JOINS WMS BOARD WAIKATO MILKING Systems
(WMS) has appointed Jamie Mikkelson as an independent director. Mikkelson was until recently a senior vice-president with GEA in Germany. WMS chair Randal Barrett, representing co-owner Pioneer Capital, said the company’s growth requires a director with international experience and expertise. Mikkelson has spent 30 years in the industry. He was a founder of the milking systems company Milfos International, bought by GEA in 2012.
He shortly afterwards moved with his family to Germany and a global role with GEA but decided to return to New Zealand. Barrett says Mikkelson’s “leadership in the global milking systems market will provide unique and valuable perspectives which will help us achieve our growth targets”. “His skills and competencies will complement and extend the existing strengths of the board.” Mikkelson says he holds a “deep respect for the Waikato brand and what it has achieved”.
Founded in 1967, WMS is fully New Zealand-owned by Pioneer Capital, Tainui Group Holdings and Ngāi Tahu Capital in equal shares. The company exports dairy technology to 30 countries and has offices in Australia, USA and the UK. Exports make up about 50% of its business and it aims to increase this to 70% in three to five years. Other directors are Paul McGilvary (formerly chief executive of Tatua Dairy Co) representing Ngāi Tahu Capital, and Lyndon Settle of Tainui Group.