Open Country Dairy chairman Laurie Margrain says National Party MP Shane Ardern, who has chaired parliamentary select committee hearings on dairy regulation, has shown bias in favour of Fonterra in recent comments on the industry.
Mr Ardern last week criticised a consultation paper from the Ministry of Agriculture and Forestry (MAF) which proposed extending an anti-monopoly protections while Fonterra controls such a large proportion of the milk market.
"He's pushing a Fonterra barrow - we think it's inappropriate," Mr Margrain said. "There is no way he could consider the legislation in an unbiased way."
"It is unacceptable that he chairs the select committee on (Dairy Industry Restructuring Act) issues - he should stand down."
Mr Ardern led primary production select committee hearings on the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill before sending it back to Parliament.
The bill needs to be passed soon if Fonterra is to be able to charge rivals a higher price for its raw milk when the dairy season starts on June 1.
Mr Ardern, a dairy farmer at Pihama, 34km northwest of Hawera, and MP for Taranaki-King Country, today said the criticism from Open Country - a key rival of Fonterra - was unfair because comments he made last week about the need to support Fonterra were made after the bill had left the committee.
When chairing the committee on dairy matters, he disclosed that he was a Fonterra shareholder "so there is no question of deceit or driving a hidden agenda".
"There is absolutely no conflict of interest," said Mr Ardern who noted that the committee did not have a Government majority and was watch-dogged by two members were former Labour ministers.
He said Mr Margrain knew this.
"I make no apologies for standing up and speaking up for what I believe," he said.
Parliamentarians had to be free to grapple with issues and sectors in which they had expertise, he said.
"Otherwise you would have the bizarre situation where anybody had any vested interest in anything at all ... wouldn't be able to serve on these things."
Prime Minister John Key would be excluded from virtually anything he presently did because he had many interests.
Mr Ardern emphasised his comments about Fonterra had been in relation to the MAF consultation, not the legislation which passed through the select committee.
"It is my strongly held view that fragmenting the dairy industry in the way that other primary industries have become will not lead to a higher farm gate milk price or a higher return for New Zealand," he said.
