DIRA rift develops

Primary Industries Minister David Carter says Fonterra shareholders must remember the company was put into "a very privileged position" with the original legislation of 2001.

"The pricing of milk by Fonterra has ramifications right throughout our primary industries," he told Dairy News. "It is critical it gets that price as accurate as possible and therefore I see no reason why Fonterra would be concerned about a regime that delivers transparency."

Fonterra Shareholders Council chairman Simon Couper described the bill as "the sort of the thing that New Zealand hasn't seen since the 1970s and that no one would risk investing in the industry with the level of intervention the bill contains." Fonterra shareholders are refusing to support the bill in its current form.

Carter is surprised by the council's reaction and says Couper has it all wrong.

"My office and MAF have spent a good deal of time explaining to Mr Couper what was in the legislation and his comments suggest he doesn't fully understand the legislation.

"The comments I've seen suggest he's particularly critical of the milk price oversight regime and yet I've seen Sir Henry [van der Heyden] as chair of Fonterra saying 'he can live with it'."

This, he says, suggests Fonterra and the Shareholders Council have a different view of the DIRA Bill.

Carter says the differences within the industry make it more difficult for the minister responsible for the bill shepherding it though parliament.

Once the bill has had its first reading it will be referred to the primary production select committee which could report back by the middle of the year. It could pass into law later in the year.

Carter says he expects submissions to the select committee, but says while there may be some changes, he doesn't expect to see the overall thrust of the DIRA Bill changed. He also warned of a risk that if people "push too hard" on the bill it will not get the support of Parliament and will lapse. That could kill off the opportunity for TAF to take place. But Carter says he's still confident of support to pass the legislation.