Source: Federated Farmers
Federated Farmers’ call for changes to the Sharemilking Agreements Act is gathering momentum, with the National Party now committing to a review of the legislation.
National’s agriculture spokesman Todd McClay has announced that, if re-elected, his party will review the Act to reflect the growth of contract milking, protect young entrants and reduce disputes.
The commitment is exactly what Federated Farmers has been advocating for on behalf of its members, the organisation’s dairy chair Karl Dean says.
“Last month, Labour said it would review the sharemilking laws if elected to government, and we challenged other parties to make the same commitment.
“It’s incredibly promising that National has today also thrown its support behind bringing the legislation into line with modern dairy farming.
“Both major parties have now committed to this, so that’s a big win. It means it’s definitely going to happen during the next term of Parliament.”
Dean says contract milking has become a common step on the dairy progression pathway, but contract milkers lack the same legal protections as sharemilkers.
“The legislation was written way back in 1937, when contract milking didn’t even exist. We need the law updated to reflect what the sector actually looks like today.
“Contract milkers perform much the same role as variable-order sharemilkers, but they sit outside the Act because they’re paid a negotiated rate rather than a share of returns.
“We know some contract milkers have struggled because they don’t have the same protections, and that’s simply not good enough.
“It’s time those protections were extended to cover contract milking too.”
There were 1,367 dairy herds operated by contract milkers in the 2024/25 season, representing 13.2% of all dairy herds.
Unlike variable-order sharemilkers, contract milkers aren’t guaranteed the minimum terms and dispute-resolution processes provided by the Act and Sharemilking Agreements Order 2011.
Instead, they rely on their individual agreements and general contract law, even where there’s a significant imbalance in bargaining power.
Dean says farm owners are also affected by the current legislation’s shortcomings.
“Sharemilking and contract milking are hugely important to our sector, giving the next generation a way to build their skills, experience and capital.
“These arrangements also give many farm owners a way to gradually transition out of the business.
“We need the legislation to reflect how farming businesses actually operate today, while retaining the flexibility that makes these progression pathways work so well.
“That’s good for everyone – both farm owners and sharefarmers.”
Dean says Federated Farmers sharefarmer chair Sam Ebbett and sharefarm owner chair Brendan Attrill have been instrumental in pushing for the review.
“They will also be instrumental when it comes to the actual review.
“Sam represents sharemilkers and contract milkers, and Brendan represents farm owners, so they bring both sides of the equation to the table.
“Having them both involved will be crucial to making sure any changes work for everyone.”
Federated Farmers wants a review to consider how the framework can provide appropriate and consistent minimum protections for comparable dairy operating arrangements, without turning independent operators into employees.
It also wants the law to recognise the nature of the work being done, rather than relying solely on how an operator is paid.
The organisation also wants the legislation to provide greater clarity around new revenue and incentive payments, and establish clearer, more accessible and proportionate dispute-resolution processes.
Federated Farmers wrote to the major political parties last month asking them to commit to reviewing the Sharemilking Agreements Act 1937 and Sharemilking Agreements Order 2011.
“We’re very pleased to have National and Labour on board, and we invite the other major parties to make the same commitment,” Dean says.
“Our dairy sector has been an absolute pillar of the New Zealand economy.
“Updating these laws will help protect the next generation of dairy farmers and ensure the sector goes from strength to strength.”