The Dairy Industry Restructuring Amendment Bill, tabled in Parliament yesterday, detailed proposals to oversee Fonterra's farm-gate milk price setting and "ensure a more transparent and efficient dairy market".
Because of the dairy giant's dominance in the New Zealand market, the price it paid its farmers for milk at the farm gate effectively became the default price that all dairy processors must pay to attract supply, Mr Carter said in a statement.
The proposed regime would give confidence that the aim of the Dairy Industry Restructuring Act to drive efficiency in the dairy industry through contestable milk supply was being met.
The price of milk has been a hot topic, with criticism it is becoming unaffordable for many families.
The Bill would primarily embed Fonterra's current milk-price governance amendments in legislation, require the co-operative to publicly disclose information on its milk price setting and introduce an annual milk price monitoring regime to be undertaken by the Commerce Commission.
It also included changes enabling Fonterra to move to its proposed Trading Among Farmers system.
Potential changes to the raw milk regulations were still being considered and an announcement was expected shortly, Mr Carter said.
In January, Fonterra chairman Sir Henry van der Heyden said the proposed changes would not work and that, instead, New Zealanders would be subsidising increasingly foreign-owned dairy processors that did not sell milk in New Zealand and sent their products and profits offshore.
More than 800 submissions were received, mostly in relation to the raw milk regulations. Some of the key points, outlined on the Ministry of Agriculture and Forestry's website, included an "overwhelming" view that existing established processors should not continue to have access to 50 million litres of milk for the next three years but should be either cut off immediately or weaned off over the next three years.
The majority of submissions were "extremely concerned" about the potential for shell companies/virtual processors to be set up, enabling independent processors to continue taking regulated milk beyond their three years or accessing more than their allocated 50 million litres each season.
Many submitters were concerned about foreign ownership of independent processors competing against Fonterra in offshore markets and taking profits out of New Zealand.
