Rural Vote Debate on Q&A: Substance or Just Platitudes?
It was billed as a chance for all the political parties to woo the rural vote, but question marks hang over just how effective this was.
Labour Party agriculture spokesperson Jo Luxton announced at the NZ Guild of Agricultural Journalists and Communicators’ ag policy debate last night that a Labour Government would "review and fix" the Act.
"It is something the sector has been asking for. We’ve listened and we will deliver," Luxton said.
Federated Farmers sharefarmer chair Sam Ebbett says Labour’s commitment is a positive step towards bringing the legislation into line with modern dairy farming.
"We’ve been calling for this review of the Sharemilking Agreements Act because the legislation has failed to keep pace with the way dairy farming operates today.
"Contract milking is now a major part of the dairy progression pathway, but contract milkers sit outside the Act because they’re paid a negotiated rate rather than a share of returns.
"So, even though contract milkers perform essentially the same role as variable-order sharemilkers, they can have quite different protections under the law because of how they’re paid.
"We don’t think that’s a good enough outcome - and a review of the law is urgently needed."
There were 1,367 dairy herds operated by contract milkers in the 2024/25 season, representing 13.2% of all herds.
Unlike variable-order sharemilkers, contract milkers aren’t guaranteed the minimum terms and dispute-resolution process provided by the Act and Sharemilking Agreements Order 2011.
Instead, they rely on their individual agreements and general contract law, even where there’s a significant imbalance in bargaining power.
Ebbett says that is increasingly out of step with the role contract milking plays in helping young farmers establish themselves in the industry.
"The Sharemilking Agreements Act was designed to provide a statutory floor for sharemilkers, but the industry has changed hugely since then.
"Contract milking has become a really important first step into self-employment for a lot of young farmers, and we need a framework that gives them confidence in those arrangements."
Federated Farmers sharefarm owner chair Brendan Attrill says the issue also matters for farm owners, particularly those using sharemilking and contract milking as part of succession and business planning.
"Sharemilking and contract milking are critical entry points into dairy farm ownership and succession pathways," Attrill says.
"They allow the next generation to build capability and capital while providing established farmers with a practical way to transition out of the business."
Attrill says the Sharemilking Agreements Act also predates modern arrangements such as hybrid contracts, processor incentives and environmental payments.
"We’ve got a dairy industry operating in a very different commercial environment from what this legislation was originally designed for back in the 1930s, especially with the increase in contract milking since the 2010s.
"We need the legislation to reflect how farming businesses actually operate today, while keeping the flexibility that makes these different progression pathways work so well."
Federated Farmers wants a review to consider whether the framework can provide appropriate and consistent minimum protections for comparable dairy operating arrangements, without converting operators into employees.
It also wants coverage to reflect the nature of the work rather than simply how an operator is paid, greater clarity around new revenue and incentive payments, and clearer, more accessible and proportionate dispute-resolution mechanisms.
Federated Farmers has written to the major political parties asking them to commit to reviewing the Sharemilking Agreements Act 1937 and Sharemilking Agreements Order 2011.
"It’s great to have Labour on board - but now we’re calling on the other major parties to make the same commitment," Ebbett says.
"This shouldn’t be a partisan issue. There is a clear case for updating legislation that was written in the 1930s to reflect how the dairy sector actually operates today."
"It’s time to bring the law into the 21st century."
