The consultation period has begun on the Government’s proposed response to reviews of Fonterra’s farm gate milk price setting and the Raw Milk Regulations.

The Governments plans include embedding Fonterra’s current milk price governance arrangements in legislation; requiring Fonterra to publicly disclose information about its milk price setting; and introducing an annual milk price monitoring regime, to be undertaken by the Commerce Commission.

Primary Industries Minister David Carter says an enormous amount of work by the Ministry of Agriculture and Forestry, with input from economic, regulatory and legal experts, has resulted in a set of preferred options for amendments to the Dairy Industry Restructuring Act, or DIRA, and the Raw Milk Regulations.

During the review Mr Carter says it was found that although Fonterra’s approach is consistent with what was expected in a competitive market, a lack of transparency remains an issue.

He says the amendments will result in a regulatory regime that promotes a more transparent and efficient dairy market.

Mr Carter says the proposals aim to ensure that the DIRA and the Raw Milk Regulations remain a durable platform for the continuing growth of a competitive and innovative dairy sector.

The recommendations for the revised Raw Milk Regulations include a three-season limit for independent processors who source raw milk directly from farmers; an increase in the total quantity of raw milk available under the Raw Milk Regulations, to approximately 5 per cent of Fonterra’s milk supply; and a range of maximum quantity limits for independent processors.

Mr Carter says he encourages all interested parties to take part in the consultation process. He says the initial negative reaction from some corners of the dairy industry should be tempered once they come to terms with what is actually being proposed.

“I think when people take the time to analyse the whole package, they’ll find it’s a very good pathway forward for the New Zealand dairy industry.

“It is a complicated piece of work and it does take time to analyse it properly.”

The minister hopes the consultation process will be constructive, as he’s expecting a number of submissions before the window closes on February 24.

“This is now open for consultation, I would want and expect the dairy industry as a whole to have a good look at what’s being proposed.

“I’d like to have their feedback, and then cabinet  will make final decisions on the package that would be put before parliament.”