NZDB clings to its monopoly

The New Zealand Dairy Board (NZDB) is determined to block government plans for deregulation of the industry.
All producer boards were given until this month to outline how they would operate without their statutory powers, but the NZDB claims it needs a longer consultation period.
The truth of the matter, however, is that the board opposes the proposals. At the NZDBs annual meeting out- going chairman, Sir Dryden Spring, claimed that dairy farmers were in favour of keeping the board’s single seller role. He added that the country could compete in global arena only through an organisation which is large enough to market its dairy products successfully.
Officials are refusing to relinquish the board’s NZ$7 billion export monopoly, saying that it would be detrimental to the dairy industry. They told reporters from the New Zealand Herald that they could mobilise 14,000 dairy farmers to lead a tractor march on parliament if the government continues in its demands.
Minister of Food and Fibre, John Luxton, said that the board would have to come up with convincing arguments if it is to persuade the government that its monopoly powers should stay.
Himself a dairy farmer, Mr Luxton said farmers will get better prices from branded products rather than commodities. He pointed out that only 20% of NZDB products are branded.
The winner here will be the side with the strongest nerve. If the minority National government persists with its controversial policy it could lose the support of many farmers, but if reforms are delayed there could well be a change of government before deregulation takes place. Both the Labour and Alliance parties have stated that they will not deregulate producer boards unless farmers request them to do so.
l The New Zealand Dairy Board reported a 20% increase in sales of its branded products for the year ended 31 May 1998, taking the sector to $1.7 billion. Total sales for the year were $7.7 billion.
The performance was especially notable given the financial problems in Asia. Around 40% (by value) of NZDB exports go to this part of the world.