LUXTON COMMENTS ON PROGRESS IN DAIRY INDUSTRY

Hon John Luxton, Minister of Commerce and Acting Minister of Agriculture expressed cautious optimism today at the move by New Zealand's two largest dairy companies to form a strategic alliance in meeting the challenge of marketing the majority New Zealand's dairy produce around the globe.

Mr Luxton said today, "While the details are not clear as yet, the voluntary agreement to work together to move to capture advantages of a new progressive deregulated environment could be good for dairy farmers,".

"We live in a fast changing world and our very important dairy industry has to progress to keep up. My aim in progressing the debate has always been to help improve the wealth and incomes of New Zealand's 14000 dairy farmers. They deserve to have the best structure so that all opportunities are captured. The best way to do this is to get more investment and innovation to add value to the 80% of dairy production that is currently sold to others to add value and sell through to the consumer.

"It is good to see this Dairy Industry initiative moving ahead of the call by Government for Producer Boards to make progress towards how they can grow and evolve without their current statutory backing, looking for a commercial rather than political solution."

"I would be concerned if this move in any way limited the choices and options available to dairy farmers for the future provision of processing and marketing services.

"I hope today's announcement will provide even more emphasis on improving farmer returns than the current political statutory legislation is able to provide

"However, with the announcement of this alliance between the major dairy companies the Government will have to ensure that the interests of other industry players are protected during the transition phase.