fbpx
Print this page
Tuesday, 13 November 2018 10:55

DIRA out of date?

Written by  Nigel Malthus
Damien O'Connor. Damien O'Connor.

The Dairy Industry Restructuring Act (DIRA) appears to be preventing Fonterra from effectively managing some aspects of its farmers’ environmental performance, says a discussion document from MPI.

DIRA may also be no longer fit for purpose, in that it provides access to regulated milk for large dairy processors “for whom it may no longer be necessary”.

However, DIRA remains relevant and effective at achieving its core objective of managing Fonterra’s dominance, and was unlikely to be encouraging inefficient industry growth or preventing Fonterra from pursuing a value-add strategy.

MPI says those were its preliminary findings after consulting industry stakeholders in the first stage of a major review of DIRA launched in May.

Agriculture Minister Damien O’Connor released the document at a ceremony on a dairy farm at Outram, Otago, to mark the start of wider public consultation. 

O’Connor said our biggest and most important export sector must be fit for the future.

“It’s timely to take a strategic view of the challenges and opportunities facing the nearly $17 billion dairy sector.”

“A productive and sustainable dairy sector that grows value and protects the natural resources it depends upon is vital to our economic prosperity and the wellbeing of all New Zealanders.”

O’Connor said DIRA, which led to the setting up of Fonterra in 2001, regulates the co-op’s dominance in the market to protect the long-term interests of all farmers, consumers and the wider economy.

“The dairy industry was built on the back of the DIRA legislation and it is a significant driver of the industry’s performance. 

“The review is looking at open entry and exit obligations, the farmgate milk price settings, contestability for farmers’ milk, the risks and costs for the sector, and the incentives or disincentives for dairy to move to sustainable, higher-value production and processing.

“We need everyone with an interest in the success of the dairy sector to take part in a frank appraisal of the issues.” 

Public submissions are invited until February 8, 2019, after which potential legislative changes will be drawn up to go to Parliament.

The document says key legislative areas are open entry requirements, access to regulated milk for dairy processors, the base milk price calculation and the DIRA review and expiry provisions.

More like this

Fat to cut

OPINION: Your canine crusader understands that MPI were recently in front of the Parliamentary Primary Sector Select Committee for an 8-hour marathon hearing.

Fonterra posts solid results

Fonterra has delivered a solid half-year result, thanks to higher margins and sales volumes across the co-op's diversified product and category mix.

Featured

Sheep drench resistance costly

Analysis by Dunedin-based Techion New Zealand shows the cost of undetected drench resistance in sheep has exploded to an estimated $98 million a year.

Dairy sheep and goat turmoil

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.

Hurry up and slow down!

OPINION: We have good friends from way back who had lived in one of our major cities for many years.

National

Govt urged to reduce ETS units

The Climate Change Commission wants the new Government to reduce NZ Emissions Trading Scheme (ETS) auction volumes as son as…

Dairy sheep, goat woes mount

Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand…

Machinery & Products

All-terrain fert spreading mode

Effluent specialists the Samson Group have developed a new double unloading system to help optimise uphill and downhill organic fertiliser…

Can-Am showcases range

Based on industry data collected by the Motor Industry Association, Can-Am is the number one side-by-side manufacturer in New Zealand.