A random cow in a field gets wind of new Fonterra policy
A random cow in a field gets wind of new Fonterra policy

The BulletinJune 7, 2019

The Bulletin: Changes coming for dairy industry

A random cow in a field gets wind of new Fonterra policy
A random cow in a field gets wind of new Fonterra policy

Good morning, and welcome to The Bulletin. In today’s edition: Recommended changes to dairy industry finally announced, signs of life in teacher negotiations, and flu vaccines are running short. 

Yesterday was a mixed day for Fonterra, with the government announcing significant changes to dairy regulation will be introduced. Farmers Weekly reports the dairy cooperative, which takes about 80% of the milk produced by cows around the country, will now no longer automatically have to accept it from new farmers. As well as that, the cooperative will have greater rights to cut farmers off who don’t meet standards, which can include environmental or animal welfare standards. It’s not quite an end to ‘open entry, open exit’ as the previous system was known, but it’s a step towards that position. It comes at the end of an 18 month review of DIRA, or more long-windedly known as the Dairy Industry Restructuring Act.

This is significant, because it was something that Fonterra have long pointed to when controversial dairy farms are discussed. A key recent example is the massive conversion that took place in the environmentally sensitive Mackenzie Basin. Fonterra opposed that conversion, but because of the rules that were in place they were obliged to still accept the milk from it. It’s unclear at this stage how strenuously the standards will be enforced for existing Fonterra farmers, but it does set up a clear block against new farms that aren’t in the co-operative’s interests. It also gives them a bigger stick with which they can walk the talk on environmental and freshwater stewardship, should they choose to use it.

Having said all that, Fonterra didn’t get everything it wanted. The NZ Herald’s Andrea Fox (paywalled, and must read if you can) writes that with the changes will come greater oversight from the government, including that the milk price panel will include one member put up by the minister for agriculture. Fonterra chairman John Monaghan was disappointed by other aspects too, including that some of Fonterra’s discretion in removing the base price for milk will be removed, and that open entry wasn’t scrapped altogether. Meanwhile, other watchers of the dairy industry say the DIRA review shows the government has caved to Fonterra demands.

It comes at an interesting time for both Fonterra and the wider dairy industry. The co-op is currently on a major programme of asset sales, reports the Rural News. That includes high profile local sales like Tip-Top, but also involves easing their way out of overseas ventures that haven’t really gone to plan. Basically, Fonterra has a lot of debt it needs to cut back on after incurring major losses and setbacks in recent years.

For the wider industry, milk production for export has never been higher. Buoyed in part by new challengers, volumes have set new records, reports Newshub. But that’s not necessarily all good news either, because as prices have fallen in the equivalent period, it hasn’t increased total value by as much. That’s potentially another crucial component to all this – Fonterra and their farmer shareholders above all want better bang for their buck from milk production. What effect these proposed changes will have on that will be fascinating to watch unfold.

There are signs of life in the negotiations between the government and teacher unions, reports Newshub. That’s about the extent of what you can say though – the story notes that a meeting was held in a secret location, with neither side willing to discuss what was said. However, a joint statement was issued which said progress had been made. It appears likely that if progress was made, it was on conditions, and reducing the workload of teachers, rather than pay. It was later followed up with another Newshub story that said next week’s strike action had been cancelled.

Flu vaccines are being restricted amid a shortage, and a surge in cases, reports Radio NZ. The season is officially underway, and it will be a challenging one for health authorities. Supplies are now being managed so that those who can get publicly funded jabs – the elderly, people with chronic illnesses and pregnant women – will be targeted with remaining supplies. There’s still a reasonable stock of vaccines for children aged six months to two years old too.

The problems at Treasury go much further than just the recent bunglings around IT, writes economist Dr Eric Crampton for The Spinoff. In his view, there has been a fundamental falling away in economics knowledge at the department. As Treasury is the lead advisor to the government on economics, Dr Crampton warns that could leave the country deeply vulnerable in the event of a financial crisis, which because of the cyclical nature of these things is pretty much inevitable.

The Productivity Commission has slated New Zealand’s productivity in a new report that spans decades, reports Politik. While there has been good productivity growth in the services sector in Auckland and Wellington, that has been much lower in other sectors and in the regions. The so-called ‘rock-star’ economy (did anyone ever actually make it to the show?) has been more based on population growth, and terms of trade.

If there’s ever been anywhere you want to get to in Auckland via public transport, put it in your diary now for Sunday 23 June. Why? Because it’ll be free, that’s why. Radio NZ reports Auckland Transport are doing a day of freebies to celebrate hitting the milestone of 100 million public transport trips for a 12 month period. The mark has been hit earlier than expected, and is up from 70 million just seven years ago. Patrick Reynolds wrote about the massive swing towards public transport on The Spinoff, and it just goes to show – if you build it, the people will use it.

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Right now on The Spinoff: Peter McKenzie profiles the young candidates looking to make their mark on Wellington local body politics this year. Harmeet Singh Sooden writes about Qayyarah West Airfield, and the deliberately obscured role of NZ troops in Iraq. Carmen Hetaraka calls for the government to be brave, and stand up for voting rights to be restored to prisoners. Denise Garland hits out at the lack of respect shown to hospitality workers, who are doing a real and difficult career despite what snobs might think about it.

Finally, Emily Writes has addressed the case of Dutch teenager Noa Pothoven. It’s a powerful piece about the real story of her life and death, rather than the false one that went around the world.

Today’s feature is a powerful piece of writing about how we in New Zealand have traditionally marked our history. Writing on E-Tangata, Moana Jackson takes in the legacy of Captain James Cook, the first British seafarer to ‘discover’ New Zealand. But it also looks deeply into other parts of the world where indigenous people were dispossessed of their land – often violently – and the monuments of that conquest that live on to this day. Here’s an excerpt:

There is a certain strange magic in the belief that waving a piece of coloured cloth could transfer indigenous lands to someone else, but it was a theatre that had long been established in the law of all European colonisers. The fact that it would have had no legitimacy in the law of the Indigenous Peoples being “discovered” was never deemed to be relevant.

The people in the Hupacasath First Nation in Canada often relate how Cook “discovered” what is now known as British Columbia. At Nootka Sound and other places that Cook renamed with the familiar sounding Queen Charlotte Channel and Resolution Cove, the rituals included cutting trees as well as waving flags.

Further north, at Point Possession in Alaska, he varied the procedure again by burying a bottle that contained “some documents claiming possession in the name of the king plus some coins.” The act was not witnessed by the local Indigenous Peoples, but it still causes some amazement that their land was supposedly taken by what, in their eyes, amounted to the depositing of some litter.

This is a delightfully weird bit of content from Seven Sharp about public perceptions of the Warriors. Basically, a few players got into disguises as cab drivers, and grilled super-fans about what they think about the team. In the end, there wasn’t really any bagging going on, but it was quite funny watching players wearing ludicrous facial hair trying to tempt fans into saying rude things about them.

In the cricket, we’ve got a brand new episode of The Offspin out – this one actually features a real cricketer too which is cool. Mitchell McClenaghan joined the show to talk about winning the IPL and the freelance T20 grind, and had a lot of really cool information about bowling mechanics too. Meanwhile over in England, the West Indies have crumbled late against Australia, in a battle of two very impressive fast bowling lineups. And finally, ESPN Cricinfo have broken a big story about South Africa, in that AB de Villiers made an 11th hour offer to come out of retirement – it was turned down and now the team has lost three from three.

From our partners: A two-tier system of energy use is developing, with those on high incomes much more able to reduce their bills than households on lower incomes. Vector’s Chief Risk and Sustainability Officer Kate Beddoe outlines what the company plans to do about that.

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