Friday, March 29, 2024

Parliament passes updated DIRA Bill

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The Dairy Industry Restructuring Amendment Bill has been passed in Parliament, updating legislation passed almost 20 years ago that allowed the creation of Fonterra.
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Agriculture Minister Damien O’Connor said the Bill put the dairy sector in the best possible position in a post covid-19 world.

The Government is committed to building a modern and productive economy, and that means having fit-for-purpose legislation.

“We want to ensure the DIRA remains fit for purpose in a changing economic and social environment, and continues to deliver benefits for our farmers, consumers, and New Zealand’s economy as a whole.”

He agreed with the recommendation made by the Primary Production Select Committee to remove the requirement on Fonterra to accept all applications from dairy farmers wanting to become shareholders and supply milk to Fonterra, or re-enter Fonterra after leaving the co-operative.

 “This Government is determined to ensure we move milk up the value chain. This change will enable Fonterra to invest in that higher-value end.

The new and improved DIRA Bill will serve our dairy sector, and New Zealand, well for many years to come.”

The Bill:

·         Removes the requirement for Fonterra to accept applications to become shareholders and provides guidance on what it should consider when assessing applications.

·         Provides for a regular review of the DIRA on a 4-6 yearly basis  to provide regulatory certainty.

·         Limits Fonterra’s discretion in regard to setting a key assumption in calculating the base milk price.

·         Requires Fonterra to appoint one member of its Milk Price Panel on the nomination of the Minister of Agriculture.

·         Removes 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.

·         Updates the terms on which Fonterra supplies regulated milk to Goodman Fielder for the benefit of domestic consumers.

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