Federated Farmers counts it as a significant win that safeguards will likely be written into the Fonterra constitution for dairy farms that change hands under a succession plan or are in a remote area.
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The Dairy Industry Restructuring Amendment Bill has passed its third reading on July 24.

“While Federated Farmers agreed the original open entry requirements on Fonterra were no longer necessary (and will now go by June 2023), our submission and our sustained advocacy over many months insisted key safeguards remain,” Feds Dairy Chairperson Wayne Langford says.

Some late changes were added to the DIRA Bill through a supplementary order paper, and the end result is that Fonterra has undertaken to give its suppliers surety:

– on farm price,

– when the farm changes hands under a succession plan,

– that for those farms in remote areas, at the end of a valley or with geographical hurdles (e.g. Golden Bay, Kaikoura), milk would still be picked up and no transport differential would apply.

“Feds worked really hard to get Fonterra to understand and agree on these issues of fairness. We knew that farmers would need this and it’s our job to do this work so our farmer members can get on with farming,” Wayne says.

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“These provisions are to be written into Fonterra’s constitution (subject to a shareholder vote), something which the Fonterra Shareholders’ Council also pushed for. The co-operative was initially very reluctant about that, so we’re really pleased our efforts have paid off and that this will now happen.

“Generally, we’re pleased with other outcomes and we’d particularly like to thank MPI and the Primary Production Committee for recognising Feds’ role as the voice for farmers,” Wayne says.

Goodman Fielder will receive up to 350,000 million litres of raw milk from Fonterra suppliers (up from 250,000 million litres) to protect domestic competition, but the supply will be at a better price.

While Feds might have wished the trigger amount to be smaller, Fonterra does not have to supply other independent processors with raw milk if in any three consecutive seasons they received 30 million litres or more from their own suppliers.

“The DIRA will be reviewed again in 4-6 years, which is an aspect we also sought,” Wayne says.

It’s been over a year since the COVID-19 pandemic caused milk prices to plummet…

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