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Milk giant Fonterra will have more ability to pay different prices to farmers based on on-farm performance matters including environmental, animal welfare, climate change and other sustainability standards under proposed changes to the legislation governing the dairy industry.
Agriculture Minister Damien O’Connor says the industry has changed considerably in the 17 years since the passing of the Dairy Industry Restructuring Act that allowed the creation of Fonterra from the previous two large dairy cooperatives.
The proposed law changes came out of extensive consultation with farmers, independent dairy processors, NGOs, and representatives of Maori interests around the country.
They will support the dairy sector to produce and export high value goods in a way that sustains the environment it relies upon.
Other changes include: allowing Fonterra to refuse milk supply from farmers in circumstances where milk is not compliant or unlikely to comply with Fonterra’s terms and standards of supply or is supplied from newly converted dairy farms;
• The DIRA shall be reviewed on a 4 to 6 yearly basis, to provide regulatory certainty;
• Require Fonterra to appoint one member of its Milk Price Panel on the nomination of the Minister of Agriculture;
• Remove the requirement for Fonterra to supply regulated milk to independent processors with their own supply of 30 million litres or more in a single season;
• Update the terms on which Fonterra supplies regulated milk to Goodman Fielder for the benefit of domestic consumers.
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