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NZ POLITICS DAILY: Fed Farmers & Labour vs Fonterra, National & the Greens

The issue of dairy industry regulation clearly cuts across traditional political lines. 

Bryce Edwards
Wed, 25 Jan 2012

With Labour and Federated Farmers siding with Fonterra against a National government and the Greens, the issue of  dairy industry regulation clearly cuts across traditional political lines.

The government is claiming that its proposed regulation is important for New Zealand consumers (see: RNZ: PM says changes to Fonterra legislation necessary), but John Key himself admits that there’s no guarantee that it will have any effect, for example, on the price of milk in New Zealand – see: Key rejects farmers' milk concerns.

The Government’s dairy industry proposals – as well as Fonterra’s reactions – are summarized in Sally Rae’s article Fonterra frothing at milk shake-up. A major objection seems to be that the regulations will directly advantage mostly foreign-owned companies. Both the lower price and additional milk Fonterra will be forced to provide these companies will end up offshore rather than in the fridges of New Zealand consumers. 
The fundamental issue is that Fonterra is a legal monopoly, dominating an economy where the free market is supposed to rule. There are very good reasons for keeping New Zealand’s dairy industry unified, as any comparison with the structure and performance of the other agricultural sectors shows. Monopolies however, need to be regulated and so Fonterra has to accept regulation as part of the deal.
If the Government was going to use regulation to reduce the price of milk in New Zealand, then it could have taken a much more direct approach, which Fonterra says they could ‘live with’. To ensure price reduction would also require some control over the cosy supermarket duopoly, which arguably has more influence over the retail price of milk than Fonterra. That is not going to happen under this government (and certainly didn’t happen under Labour). Instead, National seems determined to assist privately owned dairy companies at the expense of the locally owned cooperative.
Control of the dairy industry is also the issue as the fate of the Crafar farms is about to be decided. Free market principles seem to have been put on the back burner by Michael Fay’s consortium as it takes legal action to use the overseas investment office to knock out a higher Chinese bid – see: Richard Meadows’ Crafar suitors launch legal action. David Shearer is questioning the value of any Chinese investment in the farms, tapping into public unease about us becoming ‘tenants in our own country’ – see: Shearer: No value to New Zealand in Crafar bid. Given Michael Fay’s record with New Zealand’s strategic assets, particularly Kiwi Rail, it would be interesting to see if the local bid would pass the same character and national interest tests that Shangai Pengxin is expected to meet. Fran O’Sullivan also has an intelligent analysis of the issues in Fay's challenge improper and absurd
Mr Dotcom is proving a bit of an embarrassment to the Government in more ways than one. John Banks’ relationship with him has already been under the spotlight, and now former Immigration Minister Jonathon Coleman is being challenged by Winston Peters and David Shearer for letting the Megaupload boss into New Zealand, despite knowing about his previous convictions - see Danya Levy’s Questions over Kim Dotcom's $10m investment and Derek Cheng’s Peters calls for release of Dotcom residency info.
As both the Waikato Times and Taranaki Daily News editorials point out, the influence of cold hard cash on Mr Dotcom’s ability to gain residency raises questions that need to be answered about our immigration processes. With the case attracting worldwide attention and looking to drag out for a very long time (see: RNZ: Dotcom case could take years, says lawyer) our legal process will be under much scrutiny. Some interesting articles that look at the wider implications are Gordon Campbell’s On Kim Dotcom’s bail application, Tom Pullar-Strecker’s Megaupload case sends Government a message and Martyn Bradbury’s Food Bill + Megauploads + oil drilling = we are America's b*tch. Also, Theresa Clifford argues that the actions of the US and New Zealand authorities should be strongly opposed and that we should be wary of the demonization of sites such as Megaupload – see: A mega attack on internet freedom
Bryce Edwards

Today’s content
All items are contained in the attached PDF. Below are the links to the items online.
Kate Chapman and Dany Levy (Stuff): PM to Ratana: National has made a difference
Kate Chapman (Stuff): Ratana warning for new Labour leader
Claire Trevett (Herald): Shearer shows off marae-style humour
Mathew Grocott (Manawatu Standard): 'Votes are for another day' in Ratana
Mathew Grocott (Manawatu Standard): 'Iwi politics' gagged me
Wanganui Chronicle: Poverty a priority at Ratana Pa
Patrick Leyland (Progress Report): Ratana: the verdict
Megaupload arrest
Gordon Campbell (Scoop): On Kim Dotcom’s bail application
Tom Pullar-Strecker (Dom Post): Megaupload case sends Government a message
Edward Gay (Herald): Bail declined for Kim Dotcom
Will de Cleene (Gonzo Freakpower): John Key Defends War on Clouds
John Braddock (World Socialist Website): New Zealand judge defers bail decision on Megaupload arrests
Theresa Clifford (Spiked): A mega attack on internet freedom
Fonterra and milk pricing
Danya Levy and Andrea Fox (Stuff): Key rejects farmers' milk concerns
Crafar farm sale
Richard Meadows (Stuff): Crafar suitors launch legal action
Fran O’Sullivan (Herald): Fay's challenge improper and absurd
David Farrar (Kiwiblog): The Fay strategy
Occupy movement
Jessica Tasman-Jones (Stuff): Occupy protesters plot their next move
Ports of Auckland dispute
David Farrar (Kiwiblog): Audited pay facts from Ports of Auckland
Dog control
Brian Rudman (Herald): Magic bullet? A lead one will do
Elizabeth Binning (Herald): 11,708 dog attacks on Kiwis last year: ACC
Eric Crampton (Offsetting Behaviour): Dog days of summer... this time with data
John Hartevelt (Stuff): Ministers prepare for grim year ahead
The Standard: In the frame
Michael Field (Stuff): NZ slips on freedom slightly
Cameron Slater (Whaleoil): The Small matter of treating
David Farrar (Kiwiblog): National candidates picking up Labour voters  
Jordan Carter (Just Left): A daring thought #labourleader
Grant Duncan (Policy Matters): Where do the Greens fit in?
Yvonne Tahana (Herald): Nothing like the life of Brian...
New Zealand Parliament: Who’s on what select committee?





Bryce Edwards
Wed, 25 Jan 2012
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NZ POLITICS DAILY: Fed Farmers & Labour vs Fonterra, National & the Greens