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Fonterra follows on from Murray Goulburn

Following on from Murray Goulburn’s (MG) announcement last week, Fonterra made a similar
announcement yesterday.

It is important to note that the actions of MG and Fonterra in late April/early May last year has caused enormous heartache for farmers and the industry.
Those impacted were hit hard and it will take a long time for the farmers to recover and rebuild not just financially but their herd sizes, their confidence,
and their emotional well-being.

These financial hits on farmers should never have happened.

Through no fault of their own, farmers who left MG or Fonterra, did so because they had no other financial option. The lack of reimbursement to these farmers
from the MG MSSP and the Fonterra Australia Support Loans Package respectively appears discriminatory and unfair.

While ADF acknowledges that both MG and Fonterra will be reimbursing existing (and retired) suppliers, they have both made a point to deny those farmers
who are no longer suppliers, yet were equally financially disadvantaged.

ADF believes that farmers who were financially forced to leave their processor should not be forced to continue to bear the cost of processor actions.
There are serious questions that must be answered about the fairness and equity of the financial impacts and treatment of those who had to move to
other processors.

Trust and respect are important parts of any business relationship and this has been lost for many farmers who supplied and currently supply MG and Fonterra.
Not only has trust and respect been damaged but so too has industry confidence, and this will take a long time to restore.

To ensure a positive future, our industry relies on all the elements to operate effectively. Now more than ever, the dairy industry needs to remain focused
and united in its goals to achieve a shared vision of improving the profitability and sustainability of dairy farmers and the entire dairy industry
in Australia.

ADF will continue to work with both processors and farmers to rebuild confidence and trust. It will take time and will require a commitment by processors
to treat their farmers as equal partners and with the respect they deserve.

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

Murray Goulburn’s pledge to rebuild

Murray Goulburn’s’
(MG) announcement on Tuesday was significant for the industry.

In their statement, MG said it would shut down its Rochester and Kiewa factories in Victoria and the Edith Creek factory in Tasmania; and ‘forgive’ the
MSSP or milk cheque clawback from farmers.

We welcome MG’s announcement to scrap the MSSP which, will bring very important financial relief to affected farmers. We believe this will be a step forward
in rebuilding trust and confidence between farmers and the processor.

Let’s hope Fonterra quickly follows suit as it did last year and reverses their cuts to farmers in 2016.

We also need to acknowledge that the factory closures will cause a significant amount of distress to the employees, dairy farmers who supply the factories
and affected communities. This is never easy and these types of transitions are difficult for everyone affected.

MG has said the plant closures are necessary to keep the Co-op sustainable and will initially cost $99m but should get a net benefit from the closures
of $15m from 2018 financial year. MG said about 360 jobs will be lost in the plant closures, which will cut costs by $40-60m over the next 18 months.

ADF recognises that these actions are designed to improve the strength of the company and ensure suppliers remain with the Co-op.

The announcement by MG has really highlighted how important a competitive and strong Co-op is for the dairy industry and we have genuine confidence that
things will change for the better.

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

Where to from here – the 457 visa

Dairy is a highly dynamic industry offering lots of opportunities for career growth and
development. However, it is no secret that we have domestic labour shortages in regional and rural areas.

Our preference is always to hire Australian workers, but there are not always enough experienced farmhands to meet the demand of our industry. This is
despite more than a decade of offering training courses and pathway programs for Australian workers to enter the dairy industry.

ADF has continued to lobby the Department of Immigration and Border Protection (DIBP) for regulation amendments to visas allowing overseas workers to fill vital on-farm and off-farm roles.

This week, the Government announced that the 457 Temporary Work visa will be abolished and replaced with the completely new Temporary Skill Shortage visa
by March 2018. ADF is concerned with the changes and is seeking clarification on many aspects from the DIPB.

We have now been advised that the current visa changes will have no impact on the Dairy Industry Labour Agreement,
which allows dairy farmers to recruit senior farm hands. We have been assured that:

  • our existing labour agreements remaining in effect;
  • our existing visa holders not impacted unless they apply for another visa impacted by the changes outside of the labour agreement programme; or
  • new nominations that we intend to lodge/related visa applications are not impacted – including applications for occupations which have been ‘removed’
    from the standard programme or are now subject to a caveat in the standard programme but remain specified in our agreement.

We also understand that under these changes, which come into effect immediately:

  • dairy cattle farmers are included on the short-term skilled occupation list and only able to apply for a 2-year visa;
  • 2-year visas can only be renewed once, which will lead to an increase in administrative burden and red tape on farmers looking to access these new
    visas;
  • dairy, like other agricultural commodities is not included on the medium to long term strategic skilled occupation list to access 4-year visas; and
  • changes have been made to the Employer Nomination Scheme (subclass 186) visa and to the Regional Sponsored Migration Scheme (subclass 187) visa.

We are still in the process of gaining clarification on what will happen to current visa applicants who are waiting on approvals and the additional occupations
available to support regional employers.

ADF supports the employment of overseas workers to fill vital on-farm roles. We will continue to liaise with government to ensure dairy farmers that need
to employ overseas staff can do so.

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

ACCC now targeting Unfair Contracts

The new unfair contract terms law is a priority for the ACCC in 2017. It will ensure small
businesses, including those which are farms, receive the right type of protection.

We have been advised that the ACCC will be taking enforcement action against a number of companies across a range of industries over business-to-business
unfair contract terms this year.

For the past six months, ADF together with State Member Dairy Organisations and Processor Members of the ADPF have been working on the Code of Practice
for contractual agreements between farmers and processors. The development of this code is instrumental in protecting dairy farmers from unfair clauses
and protecting our processors from incurring millions of dollars in fines. Now with full industry support, the Code of Practice is due to be finalised
shortly.

The ACCC has reinforced the importance that if you operate a small business, you may be required to enter into standard form contracts with other businesses
for goods and services. All dairy farmers should check the contracts they have with suppliers of inputs, like grain, to ensure they conform to the
new legislation. The Australian Consumer Law now prohibits unfair terms in most of these contracts.

In their communications, the ACCC stated that it was no secret that traders (typically larger businesses) put potentially unfair clauses in their agreements,
such as terms that give them:

  • an unreasonable ability to cancel or terminate an agreement
  • broad and potentially unreasonable powers to protect themselves against loss or damage
  • the ability to unilaterally change the terms of the contract
  • unilateral discretion to reject or downgrade produce
  • an unreasonable ability to limit or prevent small businesses from exiting their contracts.

To be ‘unfair’, a term must:

  • cause a significant imbalance in the parties’ rights and obligations
  • not be reasonably necessary to protect the legitimate interests of the party advantaged by the term, and
  • cause financial or other detriment (such as delay) to a small business if it were relied on.

If you come across terms in a standard form contract you have been offered or you have entered into, and which you think may be unfair, you can report
it to the ACCC Infocentre

For more information, including the definition of a small business and the meaning of ‘unfair’ contract terms, please see the ACCC website

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

Making the most of Canberra

On Wednesday,
Australian Dairy Farmers (ADF) were in Canberra to discuss a range of issues with Ministers and Members of Parliament.

Throughout the day, ADF had the opportunity to discuss what is working well within the industry and to discuss what else needs to be done.

Our advocacy and policy work is at the heart of everything we do and is essential to ensuring Australian dairy remains competitive and well aligned for
growth.

These meetings give us the opportunity to pursue important industry policy priorities and to reaffirm relationships with Ministers.

The main issues discussed included:

  • The progress on the draft Code of Practice;
  • The impact of technical barriers to trade (TBT) on the Australian dairy industry’s international trading opportunities;
  • Access to overseas workers to fill our workforce labour gaps;
  • Pathways to permanent residency for New Zealand born dairy farmers; and
  • Reiterating our support for the Effects Test currently before Federal Parliament.

ADF continues to advocate for policies which will support the industry and we will continue to seek Government support to help drive innovation, which
increases productivity and profitability.

We’re committed to ensuring the voice of the dairy is heard by highlighting the issues to Government and working with them on important reforms.

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

Australia, we are in good hands

This week, ADF President, Terry Richardson, took part in his first Animal Health Australia
(AHA) industry forum in Canberra.

The meeting was called to discuss a range of topics including the management of the Emergency Animal Disease Response Agreement (EADRA), a unique contractual
arrangement between Australia’s governments and industry groups to collectively reduce the risk of disease incursions and manage a response if an outbreak
occurs.

Based on his first impression, Mr Richardson said the familiarisation and training offered to industry in the event of an outbreak is second to none.

“It is reassuring that as a collective we can come together with a shared goal of enhancing on farm bio-security practices and regulations.

“The degree of expertise and good management of our animal health and welfare issues means we are able to respond to any situation and manage any diseases
to minimise their impact on farmers.

“This high level of preparedness is vital to show just how fast we, as an entire commodities industry, are able to respond to any outbreak should an issue
arise”, said Mr Richardson.

Mr Richardson also took part in training for the National Management Group who have overall management responsibility in the event of an exotic disease
incursion in Australia.

“The spread of the white spot virus in the SE Queensland prawn industry really highlights the threat posed to all agriculture from failing to maintain
Australia’s strict biosecurity defence capabilities.

“It is important that we have adequate resources at the national and state levels, or we risk great (and increasingly) severe consequences.

“A large outbreak such as Foot and Mouth Disease would have significant repercussions and cost our economy up to $16 billion”, Mr Richardson said.

ADF has strong group of staff and farmers who are well prepared to respond to the threat of disease to safeguard the dairy industry and Australia’s reputation
as a producer of safe, clean food.

In addition, resourcing of biosecurity remains a high priority for ADF and all industry bodies including AHA Industry Forum are encouraged to continue
to pressure all governments in recognising this as a priority in the national interest.

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

What a gas

It is no
secret that gas prices are on the rise.

An essential resource, gas is used to pasteurise milk and produce the heat needed for our driers to create milk powder.

Gas is already a significant input cost for dairy processors in Australia. Based on reports, gas prices are forecast to rise between 50-100 per cent by
2019. This will impact the processing of dairy and increase the manufacturing costs of milk products. The impact of any gas price rises can and will
be felt by dairy farmers through their processors.

The rise in gas prices are due to supplies being diverted to meet international liquefied natural gas supply contracts, low levels of exploration and forecast
production, restrictions on onshore exploration and development in some states and territories, and infrastructure constraints. Tighter gas supply
translates to higher gas prices.

As the laws of supply and demand would suggest, Australians, sitting on bountiful gas reserves, should be enjoying cheap gas prices. But that’s not the
case as a high percentage of our gas is being exported overseas.

Further to this, last year, the Victorian Government with bipartisan support banned unconventional gas exploration, including the controversial process
of hydraulic ­fracturing (fracking), and extended a morat­orium on onshore conventional gas exploration until the end of the decade.

New South Wales and Tasmania also have various bans on onshore gas exploration and development in place. This means that the competition by domestic and
international consumers for gas from existing fields will intensify, which will drive up prices further.

There are surely many policy levers that can be considered in this environment. One such lever was implemented more than 30 years ago, and formalised in
2006, as the North West Shelf offshore gas production was being developed. The WA Government implemented a policy of domestic reserve of 15 per cent
to ensure their domestic market was not adversely impacted from the development of export markets.

It is understandable why many communities and farmers are concerned with hydraulic ­fracturing (fracking), and why there was bipartisan support to ban
this type of unconventional gas exploration. However, we support onshore conventional gas mining which currently has a moratorium and, according to
the Australian Competition & Consumer Commission, is needed as insufficient reserves exist for domestic and international demand.

In response, the COAG Energy Council will be implementing a package of reforms. Even so, there is still uncertainty whether sufficient gas will be available
to meet future domestic demand.

The dairy industry along with other manufacturers are concerned about the policy failures in Australia when it comes to gas availability and prices. We
need to add our voice to the growing list of industry groups who are calling for urgent action to address the shortage of gas on the domestic market.

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

Lessons learnt from the Senate Inquiry

Last week ADF were asked to speak at the Senate Inquiry in Shepparton, Victoria.

Before it was our turn, we listened to a number of dairy farmers from the region offer valuable insight into an industry that has seen its fair share of
hard knocks.

Centred around a few general themes, the dairy farmers talked about having greater transparency between processors and suppliers, contract fairness, and
a lack of faith with industry body leadership.

Firstly, we believe that the dairy industry needs improved contracting arrangements between farmers and processors; greater transparency through earlier
and clearer pricing signals for farmers; and less risk for farmers and more balance in risk along the supply chain.

In relation to greater transparency, ADF is in the final stages of completing the draft Code of Practice. We have worked in consultation with our state
member organisations, farmers and processors, and the ADIC to develop a Dairy Industry draft Code of Practice for contractual arrangements to help
ensure greater transparency and fairness in milk supply and pricing. This will also minimise the chances of what happened in April/May last year being
repeated.

ADF believes that it is important that contracts are fair, simple, realistic and easily understood by both parties ensuring there is more balance for farmers
along the supply chain. The Code of Practice will help ensure that supply agreements and contracts comply with the Unfair Contracts law that came into
effect on 12 November 2016.

This unfair contracts legislation extends existing protections against unfair contracting practices and is a practical step, that when coupled with the
dairy industry Code of Practice, will provide dairy farmers with fairer and more transparent contracts.

ADF will continue to work with farmers, processors and our industry bodies to build a system that builds resilience, rather than leaving farmers vulnerable.

Lastly, while it is important to acknowledge the things we do well as an industry it is also important to recognise the things that we could do better.
The farmers have spoken and we have listened.

While we are busy working on and achieving important outcomes for farmers, a lot of work goes on behind the scenes that we don’t often communicate to our
members well enough. We hear this and are endeavouring to do better.

It’s also important to note that the ACCC Inquiry into the Dairy Industry has started. If you are a dairy farmer and can attend one of the public forums
the ACCC needs to hear from the ‘horse’s mouth’. The key issues to be considered in the Inquiry include competition between milk processors, the effects
of private label products and pricing, contractual practices, availability of price, global markets and key factors influencing the profitability of
dairy farms.

 

The next public forums will be held on:

  • Tuesday 14 February 2017, Traralgon, VIC
  • Monday 27 February 2017, Warrnambool Golf Club, Warrnambool, VIC
  • Tuesday 28 February 2017, Shepparton Golf Club, Shepparton, VIC
  • Thursday 16 March 2017, Mercure Sanctuary Golf Resort, Bunbury, WA
  • Monday 20 March 2017, Hahndorf Football Club, SA
  • Wednesday 22 March 2017, Burnie Golf Club, Camdale, TAS

For more information and to register your interest please visit https://consultation.accc.gov.au/compliance-enforcement/accc-dairy-inquiry-farmer-consultation-forums/

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

Explaining the Dairy Levy Poll

Today, it was announced that there will be no change to the dairy levy.

This decision was made by the Levy Poll Advisory Committee (LPAC), whose core role is to make recommendations regarding the level of farmer levy funding
to support the long-term research, development and extension strategy for the dairy industry.

It is important to note, per the ‘Explanatory Statement’, issued by Authority of the Deputy Prime Minister and Minister for Agriculture and Water Resources
that the changes may provide Dairy Australia with savings of up to $1 million every five years, which could be re-directed towards research & development,
plus marketing and promotion activities for the benefit of the dairy industry, including dairy farmers.

Given the announcement of the LPAC decision, there will likely be some opposition to the recommendations. Therefore, it is important that there is a good
understanding of the process which formed the LPAC and what could happen as a result of the recommendation.

Background

During 2015, there was a levy poll review process undertaken to consider the requirement for Dairy Australia to hold a levy poll every 5 years.

That process led to a recommendation to levy payers to change the regulations and form the LPAC, which would undertake a review of levy funded activities
and make recommendations to industry on whether a levy poll to change the levy rate was required.

Levy payers voted in late 2015 to accept the proposed changes to the levy setting process. New regulations to give effect to the changes were signed by
the Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce in late December 2016.

The LPAC was convened several times in the second half of 2016 to consider whether a levy poll should proceed in 2017 as was required under the previous
regulations. These LPAC meetings were based on draft regulations which were expected to be signed off late in 2016.

Australian Dairy Farmers and Dairy Australia, under the new regulations process, were required to provide the LPAC with a joint paper and recommendation
on what should happen with the levy rate. The joint recommendation was for no change in the levy rate.

The major piece of information available to inform farmers will be the LPAC report which gives an outline of the work it did, what information it used
in arriving at its recommendation(s), who it consulted with, its assessment of the value of the DA levy, etc.

Set up and composition of the LPAC

The six initial members of the LPAC were nominated by Australian Dairy Farmers, Dairy Australia and the Australian Dairy Products Federation. The initial
members formed a selection panel that proceeded to select up to nine milk producer levy payer representatives who applied to become members of the
Committee. All levy payers were invited to apply for one of the nine levy payer positions.

All the details around this are on the Levy Poll Advisory Committee web site – www.dairylevypolladvisorycommittee.com.au

What happens next?

As required by the new regulation requirements, the Chair of the LPAC – John Lawrenson, is required to advise Dairy Australia’s Chair and Minister Joyce,
of the decision of the Committee. This happened this week, along with the media statement issued by the LPAC.

Dairy Australia has 14 days from receipt of the decision of the LPAC to advise all levy payers of the outcome.

Any levy payers wishing to oppose the LPAC recommendation and propose an alternative option can initiate a petition.

Levy payers who are Group A members of Dairy Australia and who together represent 15 per cent of total levies paid in the previous financial year, will
have 75 days to lodge a petition with Dairy Australia, requesting a levy poll to be held and specifying their proposed levy option.

If there are one or more petitions which each represent at least 15 per cent of the total levies paid, then Dairy Australia will be required to hold an
Extraordinary General Meeting (EGM) at which Group A members of Dairy Australia will have the opportunity to vote to either proceed or not proceed
with a levy poll.

If the resolution to hold a levy poll is passed at the EGM, Dairy Australia must present the petition and the results of the vote to the LPAC within 14
business days after the resolution is passed.

The LPAC must also request Dairy Australia arrange a levy poll as soon as reasonably practicable and must set out the levy options proposed by the petition
and may set out any other levy options which LPAC proposes. LPAC has an ongoing role in the conduct of a levy poll including, but not limited to, information
to be provided to levy payers to use in determining their voting intention.

In the event of no petitions which represent 15 per cent of total levies paid within the 75-day period, the levy rate remains unchanged and there will
be no Levy Poll.

What could happen

During the last levy poll, there was a reasonable percentage of farmers who voted for a zero levy, so it is not unreasonable to expect there will be one
or more groups who will organize a petition to have a levy poll with a levy rate less than currently applies, or set to zero.

To guarantee the fair and democratic rights of all levy payers who are the Group A members of Dairy Australia, ADF believes it was important that provision
was made in the new regulations to ensure there was a process to allow different views among farmers to be considered.

Whether a petition reaches the full 15 per cent threshold to trigger a EGM of Dairy Australia Group A members will be the issue.

If there is a need for an EGM because of one or more petitions to Dairy Australia, then ADF will need to be clear about why it recommended, jointly with
Dairy Australia, that the levy rate should remain unchanged.

This will be a process ADF must manage during the leadup to a required EGM of Dairy Australia but may also need to be engaged in the debate during the
75 days in which a petition can be presented.

To read the explanatory statement of the Legislation, visit https://www.legislation.gov.au

For further information regarding the Dairy Levy Poll process review, visit
www.dairylevypollreview.com.au

John McQueen

Interim ADF Chief Executive Officer

Uncategorized

ADIC Leading the Dairy Response to MDBP

Back in November 2016, we welcomed the announcement by the
Murray-Darling Basin Authority (MDBA) to reduce the northern basin target.

It was pleasing to see the MDBA proposing to reduce the water recovery targets in the Northern Basin by 70GL following a rigorous socio-economic analysis
in the north, which showed significant adverse impacts on agriculture and regional communities.

So far, 1966 GL had been recovered or more than 70 per cent of the original 2750GL plan for the environment, including 1651 GL in the southern-connected
Basin comprising northern Victoria, southern NSW and SA.

The Basin Plan is affecting water availability and affordability, particularly for dairy farmers in shared irrigation districts. This is presenting a significant
adjustment challenge. The Murray- Darling Basin Authority is due to submit its first five-year review in mid-2017. It has promised to work with States,
regions, community and industries to inform this review.

The most affected by the Basin Plan is the Goulburn Murray Irrigation District (GMID) which supply’s more than 80% of the Basin’s milk.

It is imperative that any further implementation beyond the 2750 GL Basin Plan is done in a way that balances social, economic and environmental outcomes
in a way that limits any potential negative socio-economic impacts of water recovery.

ADF is working closely with our state members and in partnership with the NFF and other commodity and irrigation industry peak bodies to get the best outcome
for the industry.

In response to the current implementation of the Basin Plan, ADIC will be focusing on the following policy positions in 2017:

  • Meet the 2750GL target in full before considering the 450GL ‘upwater’ provided no additional negative socio-economic impacts are caused.
  • Review the modelling to account for the full 650GL in offsets as long as the environmental works can deliver similar or better outcomes to 2750GL
    with less water.
  • Assess the potential socio-economic effects of the 450 GL ‘upwater’ before commencing any recovery of it.
  • Change the socio-economic neutrality test so that it is measured on a community level.
  • Call on the Ministerial Council (MINCO) to determine the terms of reference for the socio-economic impacts study.
  • Request environmental water efficiency be maximised before recovering water from irrigation communities.

What we need now is the Murray Darling Basin Plan and the law that sits behind it to have the same flexibility as our policy position. The Basin Plan is
already having a significant impact on farmers, manufacturers and the rural communities they support, with more to come as recovery deadlines approach.

Terry Richardson

Acting ADF President

Uncategorized

Changing of the guard

As you may
have heard, David Basham stood aside as ADF President last week for a period of three months. His decision to run for the Seat of Finniss in the South
Australian State Government came about quite suddenly, we wish him every success with his campaign.

Another announcement was the appointment of Terry Richardson to act in the role of ADF President. Terry Richardson jointly operates a dairy farm with his
family in Deans Marsh, south west Victoria, where he has lived since 2004 and has a 550-milking herd.

Terry was appointed as an Australian Dairy Farmers Business Director in November 2015 and was the logical choice for acting President due to his background
and experience.

Holding several positions in the dairy industry, both in New Zealand and Australia, he was a director of Kiwi Co-operative Dairies for seven years as well
as a dairy consultant with Agriculture New Zealand. After moving to Australia, he joined his local UDV branch and was later appointed to the South
West Regional Extension Committee. He was previously Chairman of Warrnambool Cheese and Butter Company and has been a director of the company for eight
years, a role he still holds.

There has been some talk in media circles that Terrys position at the Warrnambool Cheese and Butter Company is a potential conflict of interest.

The ADF Board asked Terry to act as the ADF President during the period of leave David has taken from the ADF Board. Members of Boards of most organisations
can occasionally have circumstances where there could be a possible conflict and the important thing is that the Board members recognise the possibility
of conflict and manage it accordingly.

This year has presented unprecedented challenges for the entire dairy sector. ADF has remained focused on laying strong foundations that builds resilience
rather than leaving farmers vulnerable and we will continue to advocate strongly on their behalf.

The events of 2016 have given ADF the opportunity to really cement our working relationships with state members – QDO, NSWFarmers, SADA, TFGA, UDV, WAFarmers,
and industry partners such as Dairy Australia and Australian Dairy Products Federation.

Continuing to work together will give us the know-how and resilience to support dairy farmers to overcome adversity and thrive in the long term.

This season has been one of the kindest seasons we have had in many years. The extended season of grass growth has improved bottom lines and with world
market prices continuing to strengthen over the second half of the year, things are looking much better for the future than they were mid-year.

May 2017 treat everyone in the dairy industry better than 2016 and we wish everyone a Merry Christmas and a safe, prosperous New Year.

Australian Dairy Farmers

Uncategorized

Good news for farmers

ADF has long-advocated for change to tackle big business misusing its power and
reducing competition in markets.

Yesterday, the last day of Parliament for 2016, Treasurer Scott Morrison announced the introduction of the s46 ‘effects test’ legislation 2016 into the
Federal Parliament.

The introduction of an effects test is in line with competition policy around the world – Australia will be joining the clear majority of developed nations
who already have established effects tests.

The provision, which will be included in section 46 of the Competition and Consumer Act 2010, will address the current unequal distribution of market power
and encourage transparency to the benefit of producers, consumers and retailers.

The considerable amount of work, investment, planning and risk required to produce, transport, process, distribute and deliver a perishable product, fresh
milk, on a daily basis is not reflected in the current discounted price of dairy by major retailers.

Supermarket discount tactics are directly affecting market supply and demand functions, effectively blocking processors from being able to provide necessary
stronger prices to farmers to stimulate milk production.

We are looking forward to the ‘effects test’ legislation being passed early next year.

Another major development that occurred in Parliament yesterday was the resolution of the backpacker tax.

ADF have consistently said that we believe it is reasonable for backpackers to pay some tax, but 32.5 per cent was too high.

Led by National Farmers Federation (NFF), ADF and our state member organisations have lobbied for a decision over the past 18 months and we can honestly
say it is a huge relief.

The impact of months of indecision have been felt across the dairy sector. What we really need now is to get the message out there that backpackers are
welcome on our farms and they will receive a fair tax rate for their work.

We thank the NFF and our members for their hard work to get this across the line. We know that this has not been easy and the process was long, however,
we adapted and united as an agricultural industry to secure a deal which benefits farmers, backpackers, tourism and regional communities.

It is important to note that although we are small team at ADF, we remain committed to driving strong policy to transform the way our industry operates
for the better.

David Basham

ADF President

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