Another Piece of the Puzzle

Senator Lambie announced she would seek a Senate Inquiry into the Dairy Industry. The ADF was quite concerned about the range of issues the Senator
wished to have addressed and worked with a range of people to achieve a more constructive terms of reference.

While we are not pleased with all the issues to be considered, we believe it is better than it would otherwise have been.

This inquiry will be in addition to the Australian Competition and Consumer Commission (ACCC) inquiry into the national dairy industry which is due
to start in November.

This inquiry presents an opportunity to examine the issues affecting the competitiveness and future viability of dairy farming in Australia with farmers
bearing nearly all the risk in the dairy supply chain in the domestic market.

Some of the issues that will undoubtedly be covered include the impact of supermarket price decisions namely the $1 milk on dairy farmers, and the
ongoing physical and mental well being of farmers.

In addition to these, the senate inquiry will likely focus on providing greater transparency in contracts with processors by offering a clear, consistent
formula for milk pricing; and include unambiguous conditions, which is something ADF has advocated strongly towards. Many farmers who have experienced
unfair milk contracts or agreements may have been burdened with debts when the milk price falls.

ADF hopes to be able to achieve implementation of fairer contract clauses through negotiations with processors and be able to provide the Inquiry and
Government with industry developed and shared solutions rather than have Government intervene to impose further regulatory burden that neither
farmers or processors want.

These points illustrate the need by industry to ease the pressure placed on farmers by having to accept an unfair share of the risk and possible financial
fall-out. We believe in greater transparency and look forward to fairer contracts and exploring ways to shed risk by engaging in future markets.

ADF and our state members are united around a clear objective: to ensure every Australian dairyfarmer has the capability, tools and support to fully
understand their individual business position, and to make decisions about their future based on sound evidence and are not be always left to take
all the risks in the market place chain.

To prepare, we believe that all farmers must have earlier and clearer pricing signals, with a more equitable pricing system that better balances risk
along the supply chain of farmers, processors and retailers. Without this, farmers and allied businesses will remain vulnerable.

If we are able to work on minimising potential risk for the future, then we welcome the opportunity to stand up for rural and regional communities
that are doing it tough to make sure that we are able to establish a long term solution that benefits all dairy farmers.

We look forward to working with industry, government and the Economics Reference Committee to advocate on behalf of the dairy farmers to ensure transparency
and equal opportunity, which will provide a fairer way to uncover inequities in the dairy industry.

The report of the senate inquiry is expected to be announced on February 24, 2017.

David Basham

Acting ADF President

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