INDEPENDENT NEWS

Government should stop sitting on its hands

Published: Sun 7 Jul 2019 11:16 AM
Government should stop sitting on its hands
Social Credit is calling on the government to stop sitting on its hands and take an active part in protecting New Zealand's dairy processing industry from complete foreign takeover.
The decision by Westland Milk farmers to sell their shares in New Zealand's second largest dairy company to China's Inner Mongolian Yili group, will give Yili a major foothold in the market, and put Fonterra on notice that it is the next likely target of the Chinese conglomerate.
Song Liang, an independent dairy analyst, has said the deal will further complete the supply chain of Yili. He added this deal was only a beginning of Yili's large-scale acquisitions in the next 1 or 2 years.
As China is estimated to overtake the US as the largest dairy market in the world by 2022, Yili is clearly making a pitch for efficiency by aiming to control the production and shipping of product from New Zealand.
Federated Farmers president Katie Milne has called the overwhelming vote of farmers for the Westland sale "absolutely stunning" due to the 94% turnout.
I have to wonder what superlatives she will use to describe Fonterra farmers selling their shares in a similar situation.
Yili's dominance in the Chinese market and its ability to manipulate the price it pays for Fonterra's product, could well make that situation much closer on the horizon than most people realise.
What would have been “absolutely stunning” was for the government to offer Westland Milk and it's farmers an overdraft facility from New Zealand’s Reserve Bank to tide them over their current problems.
It's ludicrous that foreign capital is seen as an investment, yet local capital provided by the country's own bank is seen as socialism or subsidy.
One sees profits being exported overseas adding to our balance of payments problems, and the other sees profits staying in New Zealand being spent in the communities in which they were generated.
It's time the government decided which is best for New Zealanders.
It's not too late to get off its hands and rescue Westland Milk, its farmer shareholders, and the dairy industry.
Katie Milne and Federated Farmers could lead that approach to the government.
Chris Leitch
Social Credit Party Leader
Ends

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