MAF Bungles LIC Share DistributionFriday, Jul 27, 2001
As the dairy industry undergoes a metamorphosis, the Dairy Board has to be quietly tidied up and its
spare parts allocated to respective new owners. An act of Parliament, called the Dairy Board Restructuring
Bill, is to be passed to cover this. It involves the usual readings and then Select Committees
where information is sought and submissions presented.
In some parts, this process could need a lot of work, but in the case of the cutting up of the Livestock
Improvement Corporation there seems to be a desire by the Ministry of Agriculture and Forestry,
as advisers to the government, to make life difficult.
Basically the shares of LIC are to be handed to the farmers that have used the Corporation's services.
The allocation of shares has been fully explored by the Corporation and by farmers for many months
because there were previous plans to enact this step. A fair plan exists that has the approval
of all involved and could easily be implemented within the Dairy Industry Restructuring Bill, but
government advisers have other ideas.
Originally the plan was to issue shares on the usage of qualifying product or services. The bill as
it stands at the moment allocates shares on the actual dollars spent. This means that those who had
Contract Mating with LIC, or those that had Contract Arrangement discounts or those people using
the Sire Proving Service get disadvantaged, in the initial free share issue.
Under the original plan these users would have been ‘bonused up’ to be treated as if they
had paid the full price equivalent. Months ago this point was put to many farmer meetings, the National
Council, and the LIC directors where it was fully approved. The current draft of the bill
means that all affected had to spend time writing submissions and sending twenty copies to the select
committee by 20th July. If time allows they have to follow that up with a trip to Wellington to
make a presentation.
That is not too bad but at the last minute MAF came up with an alternative idea that it wants opened
to discussion. The idea is that share allocation should be based on “…the amount of data
contributed to the core database by a farmer or sharemilker….”
The plan is obviously scatterbrain theory and lacks substance, but more importantly it flies in the
face of the plans the dairy community already have worked through.
Even more alarming is the fact that for common mortals the time has passed for submissions to government,
while the advisers to government think they still have a chance to influence the bill at these
later dates. By putting such an idea forward at this late stage MAF have forced people to waste
time and energy countering the arguments that had already been settled
This is not the responsible behaviour that we have the right to expect from MAF.
Let’s hope our politicians will have the knowledge and understanding to dismiss this late MAF
nonsense and allow equity to prevail, when distributing the LIC shares.
Contributed by associate editor David Clegg