Dr LYNDA SCOTT (National—Kaikoura) : The National Party will be supporting the Animal Products (Dairy Products and Other Matters) Bill. The dairy industry is worth nearly $6 billion in export earnings per year to New Zealand. It is essential that there is confidence, worldwide and in New Zealand, in New Zealand dairy food products. The safety of those products is a matter of concern for all of us. This bill sets in place standards and risk-based management practices that ensure that is the case. The bill was developed after the release of two discussion documents, one from the previous National Government in 1999 and one from the Labour Government in 2001. The bill has had the support of all parties up to this point, and I believe that tonight it continues to have the support of all members.

The title of the bill basically covers what the bill intends. The risks that milk products can contain are pathogens and residues. Back in the very early days of New Zealand’s history, unpasteurised milk was very common. But the risk of TB and other pathogens was recognised, and pasteurisation became standard from the 1900s. The sort of pathogens that milk can contain are retroviruses, which are killed by pasteurisation and processing, zoonotic diseases, and residues of veterinary medicines and antibiotics. We see that antibiotic resistance is increasing throughout the world and is a considerable problem. We must have a risk management programme, as stated in Part 1.

Luckily the dairy industry has actually taken a responsible approach to the use of antibiotics, and they are not used routinely. In some other countries they are, which causes problems with animals and with the increasing resistance to antibiotics. The routine use of antibiotics in animals can lead to increased antibiotic resistance amongst humans, and that is of major concern in terms of serious diseases. Tuberculosis is a good example of that, because worldwide TB resistance to antibiotics is proving to be an increasing problem. I remember, many years ago, working at the old chest hospital here in Wellington, because before I was a doctor I trained as a nurse. I remember the antibiotics we had to give to people for months on end to try to cure TB. TB continues to be a problem, and antibiotic resistance is an increasing problem.

Safety and quality assurance programmes for milk and dairy products from the farm to the table are being developed under this legislation, and that is welcomed. Milk products are a great growth medium, and it is vital that milk is collected in ideal conditions and transported to the milk company for processing within 24 hours, before there can be any deterioration. The Act that is to be repealed, the Dairy Industry Act, is over 50 years old. That Act is specifically for milk products. Now we will have the dairy industry brought under the Animal Products Act. Rather than end-product testing, we will have a process of certification for the whole collection, treatment, and manufacture of milk products. That approach is needed to facilitate the entry of New Zealand dairy products into more overseas markets.

New Zealand cheeses, ice cream, and chocolate have to be amongst the best in the world. [Interruption] Absolutely and undoubtedly. When I travel overseas New Zealand chocolate is one thing that everybody asks me to bring.

EDWIN PERRY (NZ First) : New Zealand First supports the Animal Products (Dairy Products and Other Matters) Bill. All that I really want to do is to use the bill’s commentary to illustrate the key points and the reason why New Zealand First wants to support the bill, because they are contained in it. As the commentary states, “The Animal Products (Dairy Products and Other Matters) Bill provides for the regulation of the dairy industry by the Animal Products Act 1999 and repeals the Dairy Industry Act 1952. The Dairy Industry Act 1952, which currently regulates the dairy industry, is outdated and imposes significant constraints on the dairy industry’s ability to facilitate trade in dairy products and to counter risks to food safety.”, as we have heard from our colleague in the National Party.

The commentary continues: “Further, the Act does not adequately facilitate the application of a risk management approach to the regulation of the dairy industry. Food safety administration in New Zealand is moving towards an environment based on the principles of food-safety risk management in line with international trends. The bill’s requirement that the dairy industry operate in a risk management environment will provide consistency with the rest of the food industry. A further aim of the bill is to facilitate the entry of dairy products to overseas markets by providing the controls and mechanisms needed for market access and the giving of official assurances.” As I have said in previous speeches in debates on this issue, in terms of cheese alone, the dairy industry provides $5.8 billion just from the cheese industry itself.

Under the heading “Export requirements and consultation with the industry”, the commentary states: “We do not recommend any change to clause 13 allowing the Director-General of Agriculture and Forestry to issue notices specifying requirements to be met in relation to animal material or animal products intended for export.” The Primary Production Committee made that decision.

I now move to another part of the commentary about provisions in the bill that are important, under the heading “Cost recovery in transition”. But before I do that, I want to say to the Committee that the select committee on this bill comprised the Hon David Carter as chairperson, Janet Mackey as the deputy chairperson, Clayton Cosgrove, the Hon Harry Duynhoven, Gerrard Eckhoff, Ian Ewen-Street, Phil Heatley, the Hon Dover Samuels, Tariana Turia, and R Doug Woolerton. Doug Woolerton’s approach and input into the bill, and his common-sense view, would have been no different from that of Gerry Eckhoff from ACT, and of the Hon David Carter. They are farmers in their own right, who approached this bill with reasonable common sense.

The provisions concerning cost recovery in transition are, I think, an important part of the legislation. The commentary states: “The New Zealand Cold Storage Association considers that any fee paid for registration under the dairy regulations should automatically constitute registration under the Animal Products Act 1999. The association also considers that where this fee has been paid to cover a period beyond the date of the passing of the bill and a fee has also been paid to register under the Animal Products Act 1999, the fee relating to registration under the dairy regulations should be refunded. We”—the committee—“have some sympathy with the submitter but understand that costs associated with the previous registration have already been incurred; money should not be refunded for services that have been provided.As section 121 of the Animal Products Act 1999 allows for the waiver of fees and could be used to avoid duplication of cost-recovery, we see no need to legislate further.”

The Bills Digest No. 1116 gives a clear overview of this bill. It needs to be passed without any fuss. I think it is a common-sense approach to the industry, which is one that provides this country with overseas funds, and also the income from primary industry that is very important for the economy of this country. The Labour Party has benefited from that rural income.

BRIAN CONNELL (National—Rakaia) : I notice that when my colleague Lynda Scott spoke on this bill she said that the parties over the last two Parliaments, including with this one, were in agreement with this legislation. I have no argument with that, because that support is based on the dairy industry itself saying that this is the type of legislation it wants, though I think that the industry is giving that confirmation through gritted teeth. I notice that the argument has been mounted that this is a modernisation of the Dairy Industry Act, but although casual listeners to these proceedings could be excused for thinking that the dairy industry has not progressed at all under that Act, of course quite the contrary of that is the truth. The dairy industry, in fact, has managed itself and created an industry that is second to none in this country, and we should be standing up and applauding its efforts. Here is an industry now that, I think, on last count was trading in 42 different countries around the world. It is an industry that, by anyone’s standard, has done very well. In fact, I think its contribution to export earnings for this country is something like $5.5 billion—nearly as big as the surplus that Michael Cullen hoards; the surplus that he has taken from hard-working taxpayers in this country.

I do not buy the argument, though, that this measure is something that has to be done to the dairy industry for its own good. This industry has had the ability to self-regulate itself to such an extent that it is the envy of other primary producing organisations around this country. The health standards that the dairy industry, or Fonterra, imposes on its suppliers is something that members should make themselves aware of, if they do not already know about them. I notice my colleague Dr Paul Hutchison has a significant interest in the dairy industry, and when he takes a call he will be able to attest to that fact, as well.

Then we get into the talk about risk management programmes, as if we are putting them in place for our own good. Well, I have to say that the risk management programmes that the dairy industry already has in place are first class. This legislation is essentially a technical confirmation, to make the industry come up to what is supposedly an international standard. I say “supposedly” because when I look at some of the regulations, the bureaucracy, and the strangling of enterprise in some overseas economies, I cannot help but think that we are being brought back to the pack somehow by putting in place this type of legislation. That worries me; it worries me a lot. I think what is happening is that we are being told, particularly by European nations, that this is the type of standard they want. That comes from nations that, in terms of their primary production, are not even on the same page as the New Zealand dairy industry, or New Zealand dairy farmers, when it comes to actually being productive and in terms of the health standards that they impose. I cannot help but think that in some way, falling for their rhetoric and dancing to their tune is going to do us damage in the long term. What we will lose is our ability to set the standard, to be flexible, and to be nimble.

Then, of course, I look at who is driving this legislation, and I see those words “the Food Safety Authority”. Well, that organisation makes the hairs on the back of my neck stand up. It has the reputation across the primary industries of this country of being almost like the Gestapo. It is bureaucratic, it is all-powerful, it does not listen, and it has been driving business after business out of business. The Minister in the chair, Marian Hobbs, is shaking her head, but that is simply out of ignorance. If she were more in touch with what was happening around this country, she would know that what I am saying is quite right. We have set a standard now that is almost so impossible to reach that people are throwing up their hands and saying that it is just too hard.

Dr PAUL HUTCHISON (National—Port Waikato) : I note the policy objectives of this important technical legislation known as the Animal Products (Dairy Products and Other Matters) Bill are, indeed, fundamental to the hugely important dairy industry of New Zealand. They include management of the risks to human and animal health from the consumption and use of dairy products, and the facilitation of the entry of dairy products to overseas markets by providing the controls and mechanisms needed for market access and the giving of official assurances.

Undoubtedly the National Party supports this bill.It is of a technical nature, and it is indeed, one of the very necessary safeguards to ensure that our vital dairy export industry is right at the forefront of the world, that it is able to carry out its business around the world in an effective, efficient manner, and that our magnificent dairy products are given the full opportunity to be exported in a highly effective way. As the member of Parliament for Port Waikato, proudly representing one of the finest dairy areas in New Zealand, I say that it is indeed right and proper that we in the National Party support this bill, which has been supported strongly by the industry.

I must mention that the Dairy Companies Association of New Zealand consists of the major exporters in the country. It represents Fonterra, Mainland Products, New Zealand Dairy Foods, Tatua Cooperative Dairy Co., and Westland Cooperative Dairy Co., and has strongly supported this bill. The association is concerned, of course, about some of the aspects of ensuring that in this process the bureaucracy does not get out of hand. I must concur with my colleague Brian Connelly that it is a worry to see the reflex reactions of this socialist Labour Government. It is so intent on increasing bureaucracy in New Zealand and putting up hurdles for exporters that it is vital that those tendencies are kept in balance.

Clause 13 is one of the important measures in this bill; it deals with the area of export requirements and official assurances. New section 60 of the principal Act, inserted by clause 13, states: “(1) The Director-General may, by notice issued under this section, specify requirements in relation to all or any class or description of animal material or animal product intended for export, if the Director-General is satisfied that the setting of the requirements—(a) is necessary or desirable”, etc. I notice that the Primary Production Committee makes the point in its commentary on the bill that: “We do not recommend any change to clause 13 allowing the Director-General of Agriculture and Forestry to issue notices specifying requirements to be met in relation to animal material or animal products intended for export.” But the commentary does state: “While consultation would provide checks and balances,”—and I think it is referring to the New Zealand Food Safety Authority, which is well known for being bureaucratic and has the mark of the Hon Annette King on it, in terms of its bureaucracy—“we consider that it is not practical to consult on all market access requirement issues.” I absolutely concur with that.

The select committee points out in the commentary: “Some of the matters will be of an urgent nature requiring fast resolution in order to ensure access to the particular market, while other changes will be of a minor or technical nature, meaning the increased compliance cost of consulting would outweigh any potential benefits.” That is why it is so important that we do, indeed, have clause 13, which does mean that the Director-General of Agriculture and Forestry can give official assurances. The commentary also states: “Many negotiations are restricted and confidential and a consultation requirement would not be appropriate.” All that is about our exporters being able to be nimble on their feet, to do things efficiently and effectively, and not to have to wait for the sort of bureaucracy that this Labour Government is so intent on putting before New Zealand businesses.

JILL PETTIS (Senior Whip—Labour) : I move, That the question be now put.

• Motion agreed to.
• Part 1 agreed to.

Dr LYNDA SCOTT (National—Kaikoura) : I am pleased to debate Part 2, “Amendments to Animal Products (Ancillary and Transitional Provisions) Act 1999”. In the debate on Part 1, I was talking about how well our dairy products are liked overseas, and I shall tell members a little anecdote of a friend whose son took back overseas with him 32 bars of New Zealand chocolate. Do members know how much that would have weighed? They would have been very heavy, but he managed to stay within the weight allowances for travel. I am sure that he will use those bars of chocolate to sustain him through some of the cold, dark winters in the Northern Hemisphere.

Jill Pettis: Like Vogel’s bread.

Dr LYNDA SCOTT: Like Vogel’s bread, the chocolate is very well liked.

This bill has had the support of the industry, and the Primary Production Committee did receive advice from the New Zealand Food Safety Authority. It is that authority, which I think was set up 3 years ago, that is going through the legislation in New Zealand to look at any legislation that is to do with food safety. It will be conducting a domestic food review to establish a programme that does protect consumers. It will also look a minimising compliance costs, and will ensure that New Zealand’s food industry is positioned for the growth we expect to see in the future. Of course, we have seen enormous growth in the dairy industry, with more and more people going into that area, herds increasing in size, and a lot of conversion of land to dairying. That is a real growth area for New Zealand. Ninety percent of our dairy products are exported.

It is no wonder that all parties support this bill. The select committee made only minor changes to it. I agree with the committee’s report where it states it wants to see compliance costs kept to a minimum. The cost recovery in transition was one point that was debated at the select committee. Select committee members wanted to ensure that the fees that were paid under the Animal Products Act could be transferred to the dairy regulations or that there should be a refund if people had to pay new fees. A National Government—soon to be—would be very keen to see compliance costs reduce and to avoid duplication of cost recovery.

One of the things I have to ask about is the New Zealand Food Safety Authority. We have a Ministry of Health that has over 1,000 people in it. The Ministry of Health has grown and grown; I think it employs about 1,200 people.

Dr Paul Hutchison: The Minister said it would go down.

Dr LYNDA SCOTT: The Minister did say the number would go down by 25 percent, but what happened was that it went up by 25 percent. So there was a bit of a problem there. While I totally agree that food safety is extremely important, why did we need to have a separate authority? Why is the Ministry of Health not responsible for New Zealand’s food safety? It seems that the more the bureaucracy grows, the less it does. However, we now have a New Zealand Food Safety Authority, and it gave advice on this bill and is conducting further domestic food reviews.

We support Part 2.

BRIAN CONNELL (National—Rakaia) : I was surprised that the Minister in the chair, the Hon Annette King, bridled so much when I attacked her sacred cow—I suppose I should not have done that—the New Zealand Food Safety Authority. Essentially, it is just an extension of this Government. That is why she really bridled. This is the Government that says: “If it moves, legislate it.” Here is another example of this taking place. Let me be clear: the New Zealand Food Safety Authority has a reputation of being an overkill organisation. It has a reputation of being almost impossible to deal with, and a reputation of: “Do it our way, or no way.” It has a reputation of not listening, of being threatening, and it has created a view that it is right at all times—of course, it is not.

That is what bothers members of the dairy industry when they ask me to address this concern on their behalf when it comes to this bill. They are concerned that having created one of the biggest and best industries in this country without the benefit of the Labour Government—without the benefit of any Government, to be fair—is that they will be smacked with red tape and legislation and it will get out of control. I caution the Minister in the chair that it is something she needs to be cognisant of. This country can ill-afford to have its largest primary export earner damaged in any way. It is a real issue because in the minds of our dairy industry and producers this is the type of thing that concerns them. The perception, whether or not it is real, is what counts.

One has only to look at the changes that have taken place across the landscape of New Zealand to realise just how significant the dairy industry now is to this country. I was brought up on a dairy farm, and I recall my father milking 120 cows and having an economic unit. He was a significant player in the industry, and that is not very long ago. Now unless people are milking something in the vicinity of 350 to 400 cows, they are not significant players. But what is not in doubt is that the intellectual property that has now been captured in this huge organisation called Fonterra, which is a culmination of huge industry players, is something that should not be ignored, and that is the concern that people have.

I have touched on risk management programmes before and was coming to the defence of the industry in saying that what it has in place now is second to none. The industry already has first-class risk-management programmes. One only needs to go to a dairy farm to see what hurdles people need to jump through in order to be able to supply their local dairy company. If people do not do it to those exacting standards, the milk is dumped. That can be a penalty of $2,000 or $3,000 to each of those suppliers on any given day. So they have some real self-interest in making sure that these things are in order. This bill simply brings those actions into a legislative form that protects their interests.

I appreciate that it will maintain our ability to keep exporting into international markets, and, of course, that is important to the industry. But we must not do it in such a way that brings us back to the pack. I have already touched on that in an earlier call. I think we are in dire trouble if we try to reach out to the standards that some of the European nations want to impose on us, simply because we are more efficient and they are not. We do not subsidise our agricultural sector at all. With those European nations we are dealing with subsidies to the tune of £30 billion annually. I just hope that the Minister, instead of getting on her high horse when I talked about the New Zealand Food Safety Authority and the threat that it represents to a lot of dairy suppliers, will take those concerns more seriously.

EDWIN PERRY (NZ First) : I too have had experience in the dairy industry, just like my colleague Mr Connell. New Zealand First supports Part 2. The products produced by this industry are wide ranging and very well received offshore. We need to protect the borders, and to make sure the industry is protected for the rest of our lives, because this country was built on the efforts of the pioneers in the primary industries. This Government has been rewarded, not because of its own efforts but because the Rt Hon Winston Peters and the Rt Hon Jim Bolger interfered with the dollar, and the industry got on its own two feet, demonstrated its reliability, and returned to the Government a percentage of the surplus it now enjoys.

I have to be very careful in speaking to this bill, because the Minister in the chair, the Hon Annette King, saw me one day in Masterton eating some of these products. I am being very guarded, and hope she does not let out the secret about what I was eating.

The dairy industry has grown. What was once sheep country on the Napier - Taupō plains is now huge dairy farms. Some of those farms are milking over a thousand cows. The dairy industry provides this country with huge dollars.

I want to touch on something Mr Connell mentioned. He was brought up on a dairy farm; I was brought up on a sheep farm, but I did have to milk two cows every day before I went to school—only two, but that was an effort. I had to drag the cream can out to the front gate, and, at the end of the week, make sure I got the cream can back with a chit in it saying what the quality of the milk was, and I was paid according to that. Today, when driving around the country, one sees milk tankers collecting milk from a wide range of areas, including places that previously were not dairy-farming country. Around Taupō, my colleague Ron Mark is a director of a trust that has won a number of awards for being one of the top dairy providers in this country.

New Zealand First supports Part 2 of this bill.

Hon ANNETTE KING (Minister for Food Safety) : I would like to take this opportunity to thank members for their contribution to this debate, and to thank the Primary Production Committee for the way it dealt with the bill and reported it back without amendment. I thank the committee members for the points they raised, but I do not agree with all of them. This bill is all about managing the risk to human and animal health from the consumption and use of dairy products, and facilitating the entry of dairy products into overseas markets. I do not think there is any argument about that, and I think both our medical professional people here today outlined very well the first objective, when it comes to protecting people’s health.

I was a little disappointed in Mr Connell’s contribution, in that he did criticise the New Zealand Food Safety Authority. It is a very new organisation and not a threat to industry, but there to help industry—to help facilitate exports and the making of quality products. I am particularly proud of that organisation. I know that it works incredibly well with industry, and what the member said was a little unfair of him. I realise he was trying to put a bit of spice into the debate—trying to gear it up a bit—and maybe to have something to say. But I personally am very proud of the agency, and I think many other New Zealanders are, as well.

The only other comment I would make to Mr Connell is that I take his point about us not wanting to have standards forced on us by overseas European markets. There is only one problem with that: if we do not accept the standards that they will accept in order to allow our products in, they have the right to say they do not want our products. So there is a balance between saying: “Well, stuff your standards.”, and making sure we have a standard that is acceptable to the people who buy our products. After all, it is a buyer’s market. We are the best in the world, but it is still a buyer’s market out there and we have to meet the standards that buyers find acceptable. In the same way, we expect people who send products to our country to meet our standards.

I thank members for their contributions. This bill will see through a measure that started some time ago, and at the end of the day it will bring the dairy industry in line with the Animal Products Act.

• The question was put that the amendments set out on Supplementary Order Paper 330 in the name of the Hon Annette King to Part 2 be agreed to.
• Amendments agreed to, and Part 2 as amended agreed to.

Dr LYNDA SCOTT (National—Kaikoura) : This is the title debate, and we are very pleased that the title debate now comes at the end. I can remember being in this Chamber and continually having title debates. They were often very amusing, especially to members of Parliament, but did not have a huge amount of relevance to anything that had gone before. Now that we have the title debate at the end, it means we can do a little bit of a summary of what we feel about the Animal Products (Dairy Products and Other Matters) Bill.

It was interesting listening to my colleague Brian Connell saying he grew up on a dairy farm, and to the member from New Zealand First talking about how he had had to milk two cows. Well, when I grew up in the Marlborough Sounds I boarded on a farm. One thing that my mother said to me was: “Lynda, never learn to milk the cows.”, which I thought was quite good advice. It was not so good when, at the milking competition at the last A and P show—my having entered it for many years, and having got into the finals a couple of times—I had an Ayrshire, which managed to kick me in the face and give me serious bruising. That was not such a great event!

This bill is supported by all members in this Chamber. As the Minister said, it is about making sure that all dairy processes, from the milking shed and the farm dairy until the dairy product is exported and sent to retail, operate under a risk management system. I do hope the Minister’s assurance that the New Zealand Food Safety Authority will continue to work with industry to try to reduce compliance costs, and to make businesses in New Zealand more viable, will hold true, and that we do not see that body becoming just another self-serving bureaucracy, rather than being part of the Ministry of Health. The fact is we are an exporting nation, and we should think about the fact that we can have year after year of excellent and safe products, but it would take only one serious contamination of our products to damage us worldwide. That means that continual vigilance is very important in risk management.

This bill has been around for a long time, since the first public consultation in July 1999. I think that shows how slowly things move through the parliamentary process—

Dr Paul Hutchison: Under the Labour Government.

Dr LYNDA SCOTT: —especially under the Labour Government. But we are trying to get this bill through tonight so that it can become law, and so that the industry, which is all geared up for this legislation, is able to move ahead.

Dr PAUL HUTCHISON (National—Port Waikato) : Thank you for the opportunity to speak on the title of this bill, particularly after the very fine speech from my colleague Dr Lynda Scott. I think she was absolutely right when she pointed out how vital it is to have continued vigilance with risk management, because there is no doubt that it is the quality of our exports and our vital export industries that is so important to New Zealand. I recall that it was a Labour Prime Minister, none other than David Lange, who, some 10 years ago—it might have been a few years longer ago than that—said that the dairy industry was a sunset industry. Shame on him! Shame on him and on the Labour Party for that awful prediction.

Hon Annette King: Look forward—grow, man, grow!

Dr PAUL HUTCHISON: The Minister of Health is saying “Grow, man, grow!”, and indeed that is exactly what the industry has done, despite the Labour Government and its reflex ability to set up hurdles for the industry. But it was good to hear the Minister of Health actually take a call on this bill, which has taken so long.

Hon Annette King: Actually, I’m the Minister for Food Safety.

Dr PAUL HUTCHISON: Sorry—the Minister for Food Safety. And that brings up another point. Why do we have a separate ministry, when this matter could surely be dealt with by the Ministry of Health, if only the Ministry of Health under this Minister were much more efficient and effective than it is. Nevertheless, I make the comment that in schedule 3, it points out that it is important to include such things as alcoholic beverages. Many of us are not aware that some of the by-products, or the value-added products, of the dairy industry are 100 percent alcohol, formulated caffeinated beverages, and ice creams. What I really want to point out is the emerging number of value-added products that the dairy industry is now producing. They include nutraceuticals, pharmaceuticals, and all sorts of goods with high value that, through research and development, the dairy industry has been able to bring up to market, and those products have been extremely important for New Zealand.

What I am concerned about, though, is that the regulations of this Labour Government, particularly in biotechnology, have made it extremely hard for that research to take place in New Zealand. It is a very, very important problem to researchers throughout New Zealand. It is common to Crop and Food Research, AgResearch, and HortResearch that unnecessary regulations brought in by this Labour Government have meant that much of that vital work has to be done offshore.

It is an indictment on the Labour Government that only several months ago, one of the very important trials on transgenic sheep to do with Huntington’s chorea was done offshore in Australia, because the verdict was that it would take too long and cost too much to be done in New Zealand.

But like Edwin Perry, I also recall being involved in milking cows myself. On this occasion it was in Ireland where the uncle in County Cavan had the largest dairy farm in that county—26 cows. We hand-milked them, popped them on the donkey and carriage, and went down to the dairy, but next door happened to be an excellent hostelry, where there was a considerable amount of wonderful Irish brew. Six hours later, one would come back to the farm and the cows would be all ready to have that excellent cycle repeated. What is remarkable though is that the Irish dairy industry has been bolstered by absolutely massive subsidies—€190 billion in direct subsidies—and that is what the New Zealand industry is having to compete against. That is why it is so important that we must have an efficient and effective system here in New Zealand.

BRIAN CONNELL (National—Rakaia) : I thank the Minister for Food Safety for taking a call. I thought she made some fair points and her contribution was reasonably balanced. I have to ask her a question, though, in relation to her saying that a part of this bill is to facilitate entry of products into overseas markets. That does pose a question about what we have been doing in the last 30 to 40 years in this industry.

Hon Annette King: There could be new markets.

BRIAN CONNELL: The Minister says there could be new markets, but I have tried to build an argument that the expertise in this industry is such that it has the ability to get into new markets. I have already said in a previous call that Fonterra now operates in 42 countries around the globe.

The Minister made a second point, and I thought on balance it was also fair, when she talked about the need to balance the standards we want with those standards imposed by overseas countries. I find myself agreeing with that, somewhat, but I wonder how hard we work in Government to convince particularly our European markets just how exacting we are in the standards we impose on our dairy industry in this country. That industry is not subsidised, unlike the ones the Minister is comparing it with. It is very hard to get more blood out of a stone, when the industry is already performing to very exacting standards.

I pose the question, and I posed it before, of just how necessary some of this stuff is. I go through the bill and see that we are putting definitions into legislation, and members of the Committee might be interested to know that under clause 5(2) “dairy material” is now “milk extracted from a milking animal;”. That is one definition of it; the second is “any material derived or processed from milk extracted from a milking animal,”. I know that Mr Perry said that he had milked cows, so he will be interested to know what a “dairy processor” is. Under the definition, “dairy processor means a person who, for reward (otherwise than as an employee) or for purposes of trade, carries out dairy processing; and—(a) includes—(i) a farm dairy operator:”.

Edwin Perry: How do you work that out?

BRIAN CONNELL: I do not know, but I thought that might bowl the member over. In the following subparagraph, a “dairy processor” is also “(ii) a transporter of dairy material from a farm dairy to a place of processing or manufacture:”. This is an industry, as I have said, that contributes something like $5.5 billion to New Zealand’s export earnings, yet we thought we had to tell the industry those things! I found the definition of “dairy product” quite interesting—one lives and learns. Under the definition, it “(a) means animal product that, having originally been dairy material,—(i) has been delivered to the place of sale for consumption, or for end use for purposes other than consumption; or (ii) has left New Zealand’s territorial waters in the course of its export:”.

I have one last point that I thought was worth mentioning for the benefit of people like Dr Hutchison, Mr Mark—in his capacity of having owned a number of dairy farming estates—and Mr Perry. I thought they might want to know what a “farm dairy” is. It is “a place where milking animals are milked”. Just for the sake of clarity, the definition goes on to state that it is a place where they are milked on a permanent basis or on a temporary basis. But the key is that it is a place where dairy animals are milked, and its surrounds could include stockyards, milking yards, or feedlots. I ask the Minister in the chair whether we really need to tell an industry that operates in 42 countries around the world, and that contributes $5.5 billion to our export earnings, how to suck eggs. Because that is what we are doing. That is the very issue I was bridling against before, when I said that what we are being threatened by here is unnecessary legislation and red tape.

• Clause 1 agreed to.
• The question was put that the amendment set out on Supplementary Order Paper 330 in the name of the Hon Annette King to clause 2 be agreed to.
• Amendment agreed to, and clause 2 as amended agreed to.
• The Committee divided the bill into the Animal Products Amendment Bill (No 2) and the Animal Products (Ancillary and Transitional Provisions) Amendment Bill (No 2), pursuant to Supplementary Order Paper331.
• Bill reported with amendment.

Report adopted.