The Dairy Industry Restructuring Act Amendment Bill is crucial to Fonterra and crucial to New Zealand, Fonterra chairman Sir Henry van der Heyden said in his opening remarks to the Primary Production Select Committee.
"The Bill will put Fonterra in a position where it can introduce Trading Among Farmers. And Trading Among Farmers will enable Fonterra to remain the national champion our farmer shareholders and New Zealand need," said Sir Henry.
"We need a stable permanent capital base to implement our refreshed business strategy that will drive returns for our shareholders, and to also protect the Co-op from future shocks such as a major drought.
"At the same time, it will maintain and enhance open entry and exit - a cornerstone of the Dairy Industry Restructuring Act since it became law in 2001.
Commenting on the Bill's Milk Price oversight provisions Sir Henry said: "The Bill will enshrine in legislation Fonterra's mechanism for determining the Farmgate Milk Price, which is robust, transparent, and can't be influenced.
"Our view is that the Bill entrenches things we already do. It also establishes a role for the Commerce Commission in reviewing and auditing this process. We don't think this regime is necessary, but we can live with it."
Sir Henry said although the Co-operative supports most of the changes in the Bill, it has identified in its submission some sections that need to be amended to ensure Trading Among Farmers can operate effectively.