The New Zealand Government has announced changes to legislation governing the country’s dairy industry.

Announced by the New Zealand Minister of Agriculture Damien O’Connor, the government will amend the Dairy Industry Restructuring Act 2001 (DIRA) and the Dairy Industry Restructuring Raw Milk Regulations 2012 (Raw Milk Regulations).

The DIRA was introduced in 2001. It promotes the efficient operation of dairy markets in the country, and saw the creation of multinational dairy co-operative Fonterra.

Damien O’Connor said: “These changes will provide certainty for the dairy industry and ensure the sector can pursue sustainable value growth for the benefit of all New Zealanders.

“The industry has changed considerably since 2001, and it is important to ensure the regulatory regime puts the sector in the best possible position.”

Some of the key changes to the DIRA and the raw milk regulations include retaining the open entry and exit provisions, with qualifications to manage risks that are currently arising from Fonterra’s large size and scale in the country’s dairy markets.

The changes will enable Fonterra to refuse milk supply from farmers that are not compliant with the company’s terms and standards of supply.

It also limits Fonterra’s discretion in regards to setting a key assumption in calculating the base milk price.

As per the new changes, the DIRA will be reviewed on a four to six yearly basis to provide regulatory certainty.

Fonterra will be required to appoint one member of its Milk Price Panel on the nomination of the Minister of Agriculture.

Fonterra chairman John Monaghan said: “Our farmer-owned Co-operative wants an industry that promotes investment across regional New Zealand and where profits are kept in New Zealand.  We stand for an industry where New Zealand farmers are paid well for their milk and the unique attributes of our environment are protected and enhanced.”