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Economics & Trade

Will EU-FTA bring fair future for dairy?

September 4, 2025

By Ben Bennett, President, Australian Dairy Farmers

As the Federal Government prepares to resume negotiations on the Australia-European Union Free Trade Agreement (A-EUFTA), the dairy industry sees a valuable opportunity to shape a partnership that supports growth, fairness, and resilience.

Australian Dairy Farmers (ADF) welcomes the chance to work with Government and stakeholders to ensure the final agreement reflects the needs of our farmers, processors, and exporters.

We believe a balanced and forward-looking free trade agreement can strengthen our industry and deepen our ties with Europe.

To that end, there are several key areas we’d like to see any A-EUFTA deliver on:

Protecting the names Australians know

Australians have long enjoyed cheeses like parmesan and feta. These names are familiar, trusted, and part of our everyday lives.

Any agreement on Geographical Indications should retain the ability for local producers to use these terms.

While the EU sees these names as region-specific, Australians recognise them as generic descriptors.

Adopting the EU’s naming system would be a significant shift for our food labelling culture, which is built on transparency and consumer protection.

It’s important that this recognition doesn’t limit consumer choice or create barriers for new entrants in our market.

Creating a level playing field

Trade works best when it flows both ways.

Today, the EU sends over 70,000 tonnes of subsidised dairy products to Australia each year. In comparison, Australia exports just 1,665 tonnes to the EU.

These numbers tell a story of imbalance. As we move toward removing tariffs on imported cheese – the last safeguard for our domestic market – we ask that the EU also opens its doors.

Fair access means both sides benefit, and both industries thrive.

Opportunity for high-value products

Australia produces high-quality dairy ingredients, including high protein whey concentrate.

Currently, Canada and New Zealand have much greater access for exporting whey concentrate to the EU than we do.

Removing quotas and phasing out duty-free access over seven years would allow our producers to compete and contribute meaningfully to global supply chains.

Supporting shared values

Australian dairy farmers care deeply about animal welfare, sustainability, and responsible use of resources.

We welcome conversations about these values, however proposed conditions must be practical and based on evidence.

Any deal should support improvement, not create unnecessary hurdles.

A partnership worth building

In 2023, the dairy industry made its position clear: no deal is better than a poor deal. That view still holds.

We are committed to working constructively toward an agreement that delivers genuine opportunity. However, we also believe that protecting the long-term interests of Australian dairy must come first.

At a time when local milk supply is in long-term decline, input costs continue to climb and one in four dairy products in Australian shopper’s baskets is imported, we can’t afford not to.

A fair and reciprocal agreement will support our industry’s competitiveness in the face of these challenges. We look forward to continuing this journey with the Australian Government and our European counterparts. Together, we can shape an agreement that protects what matters, unlocks growth, and gives Australian dairy a fair go for the future.

Economics & Trade, Farming operations, People & Community

Disaster response a state-by-state proposition

July 3, 2025

With around half Australia’s dairy farmers either battling a crippling drought or rebuilding after floods, there’s a lot to unpack when it comes to governmental responses around the country.

The most recent estimates of significant decreases in the Australian milk pool in regions impacted by drought and flood demonstrate that it is even more imperative that government’s get the response right.

Yet, that’s not what we’re seeing across the board.

While states like South Australia have done a great job engaging with dairy farmers and delivering fit-for-purpose support, unfortunately the response in other locations isn’t as inspiring or useful.

The South Australian government has taken a swift and coordinated approach to drought relief as conditions continue to worsen across the state.

It’s a positive example of how government and industry can work together to support farming communities during crisis. In contrast, many dairy producers in Victoria have expressed concern over the timeliness and delivery of assistance available in that state.

The South Australian Government has worked constructively with the agricultural sector to deliver meaningful, practical support to communities facing severe feed shortages, water insecurity and mental health strain.

Key elements of South Australia’s drought response include:

  • $55 million in targeted drought relief announced in April 2025, encompassing infrastructure grants, mental health services, and fodder freight subsidies.
  • $18 million in support announced in December 2024, focused on on-farm needs and longer-term drought resilience.
  • Freight assistance for fodder has provided critical cost relief for farmers transporting feed long distances, with hay prices exceeding $700 per tonne.
  • Consultation with regional stakeholders has ensured that policy decisions are informed by local conditions and farmer feedback.

South Australia has shown that when governments engage early and work closely with industry, the results are practical and immediate.

However, across the border, dairy farmers in South-West Victoria, Gippsland and Northern Victoria continue to face mounting challenges, with many now operating under drought conditions for two consecutive seasons.

New South Wales faces two challenges – the state’s southern dairying regions are dry, while on the northern coast dairy farmers are rebuilding after one-in-500-year flooding.

The State Government’s flood response was another good example of how governments can act swiftly to help farmers.

A natural disaster was declared quickly and financial support flowed swiftly to dairy farmers. It wasn’t perfect, and ADF publicly raised the need for increased support, but it was relatively efficient.

With farming organisations and the NSW State government now applying to the Commonwealth for ‘Category D’ Disaster Recovery Funding assistance, it is hoped the Federal Government will act quickly and decisively in granting this recovery funding for primary producers and dairy farmers in Northern NSW.

Meanwhile in South-West Victoria, the drought is the worst since records began.

While the $37.7 million Victorian Drought Support Package announced last month is a welcome development, concerns remain around its effectiveness on the ground.

There are several challenges in Victoria. Firstly, an absence of targeted fodder freight support is placing significant financial strain on farmers already facing elevated input costs.

Processing delays at saleyards and abattoirs intensified pressures to manage livestock, further compounding the drought’s impact.

An overarching issue is the limited engagement with dairy farmers during the package development phase, which raises questions about how well the programs reflect on-farm realities.

ADF encourages the Victorian Government to consider greater collaboration with local agricultural sectors, and to ensure that delivery of support is both timely and tailored to the needs of regional communities.

Both South Australia and Victoria are home to some of Australia’s most productive dairy regions – now among the hardest hit by prolonged dry conditions.

The drought conditions, however, are not unique to Victoria or South Australia.

Across many farms in southern dairying regions, pasture-based feeding has been abandoned entirely, replaced by expensive supplementary feeding strategies.

Input costs, especially for hay and feed, have risen by more than 50% year-on-year. Farmers are reporting weekly feed bills exceeding $25,000–$30,000.

Milk production is dropping, while stress and fatigue among farming families continues to grow.

Drought is a national issue, but the response shouldn’t depend on which State you farm in.

South Australia and NSW have set strong examples, and I encourage all governments to match that level of responsiveness and partnership.

I also urge the Victorian Government particularly to enhance its approach – by increasing coordination with both the sector, introducing targeted freight relief, and working with the Commonwealth on greater Disaster Relief Funding.

By Ben Bennett, President, Australian Dairy Farmers
Column originally published in ACM Agri publications.

Economics & Trade

Dairy weathering a perfect storm

June 5, 2025

Australia’s dairy farmers are facing an unprecedented dual crisis and need urgent, meaningful support from governments.

Nearly half of the nation’s dairy farmers are grappling with drought conditions. For some, it’s the worst since records began.

Meanwhile, more than 100 dairy farmers in New South Wales are cleaning up after a 1-in-500 year flood.

The devastation left by these extreme weather events, combined with lacklustre new season milk prices and high input costs, creates a perfect storm of challenges that threaten farm viability and Australia’s food security.

Dairy farmers in South Australia and South West Victoria are battling the worst drought on record. It’s also hitting hard in northern Victoria, Gippsland and extending into NSW.

Traditionally high rainfall zones are now parched, leaving farmers struggling to feed and water their cattle.

The economic toll on farmers is staggering.

Those affected by drought face exorbitant costs to secure feed and water for their cattle. Hay prices have surged by up to 54% year-on-year.

Meanwhile, flood-affected farmers have lost cattle, fodder, fencing, infrastructure, electricity, communications, and access to their properties.

In both instances, there is an immediate need for support and it’s critical to ensure farms survive.

Milk production is declining as farmers are forced to de-stock and reduce herd sizes due to the lack of feed and water.

The backlog at abattoirs and saleyards means some farmers are waiting weeks to offload cattle, despite not being able to feed them at home.

The ramifications of decisions being made over the coming weeks and months will be felt for years to come, as herds take time to rebuild.

Meanwhile the emotional toll on farmers cannot be overstated.

The pressure to keep their cattle healthy amid these crises is immense, leading to increased stress and mental health challenges.

The shortage of feed, fodder, and hay has forced farmers to source supplies from as far away as Queensland, adding to their logistical and financial burdens.

No price respite in site

Despite these multiple disasters, milk prices remain low, largely due to supermarket pricing strategies.

Dairy processors have just revealed their modest prices for the new milk supply season.

To borrow the catch phrase the processors used last year, we continue to see domestic prices disconnected from international markets – and not in a good way – as this year Australian processors’ prices lag well behind international markets and competitors such as New Zealand.

We also recognise they’re hamstrung by our big supermarkets.

When a cyclone hits, the price of bananas rises within weeks. Yet when nearly half Australia’s dairy farmers are hit by drought or floods, milk sells for the same low price every day in the supermarket.

Time to show up

What really grinds farmers’ gears when they’re facing such immense pressures is the government’s narrative that such natural disasters are unpredictable, yet farmers should be “prepared” and “resilient”.

It’s nonsense. What they’re really being asked to do in this instance is prepare for both a 1-in 500 year flood and the worst drought in memory.

What is unpredictable is whether our governments will show up when the people who feed them are on their knees.

You can’t manage climate change with media spin and a loan scheme no one can access.

If you want self-reliance, give us policies that actually work in the paddock – not just in Parliament.

The dairy industry is calling for immediate and meaningful support from the government to help farmers navigate these extreme conditions.

There are several key actions that can be taken in both the short- and long-term to provide relief and build resilience.

In the short term, we’d like to see the activation of “Category D” disaster support under the National Emergency Management Agency’s arrangements.

This measure would pave the way for farmers to receive low interest loans or cash grants to help with the costs of bringing in water and feed.

Additionally, the government can boost the supply of feed available by underwriting the import of feed from overseas to boost supply and help farmers get through the spring.

We’re not asking them to buy the feed – just to provide some certainty to importers and give them the confidence needed to direct ships our way.

The industry sees palm kernel extract (PKE), as one good alternative feed source. It’s already shipped in great quantities to New Zealand.

In the longer term, we seek support to address the root causes of the challenges we face this season.

One urgent need is action on water infrastructure projects such as stock and domestic water pipeline for South-West Victoria.

This is a proposal we’ve been taking to government for almost a year now, and for which we have seen funding to renew work on the existing business case

However, what industry really need from both state and Federal Governments is a genuine public commitment to co-funding the project.

If government is genuine about national food security, preparedness and resilience, this is one infrastructure project that will give hope and confidence to farmers to keep investing in the largest dairy producing region in Australia.

By Ben Bennett, President, Australian Dairy Farmers

Column originally published in ACM Agri publications.

Economics & Trade, Farming operations, People & Community

Calls for government to invest in dairy future

April 7, 2025

Just as dairy farmers naturally look to change as an opportunity to innovate, Australian Dairy Farmers (ADF) this week launched its suite of shovel-ready commitments for the Federal Election.

With Australia’s dairy industry at a critical juncture, ADF calls on the Federal Government to reinvigorate dairy production, help modernise farm operations and strengthen regional dairy communities.

Dairy farming is a cornerstone of regional economies, driving jobs, innovation, and sustainability through modern farming practices.

Despite consumer demand for our nutritious product, farmers are battling declining production, high input costs and operational barriers.

ADF’s 2025 funding priorities provide targeted investment to secure the industry’s future, ensuring farm succession, efficiency, water security, and digital innovation.

With strategic government support, Australian dairy can remain competitive, sustainable, and resilient. This will help to boost national food security and strengthen rural communities.

ADF’s cohesive policy priorities recognise that dairy farming is more than just milk production—it provides essential nutrition, drives jobs, supports service industries, and fosters innovation through new technologies and modern workforce practices.

Attracting new farmers and encouraging reinvestment in the sector will help lead to greater productivity, enhanced sustainability, and stronger regional economies.

As dairy production prospers, so do the towns, businesses, and services that rely on it.

To make this vision a reality, ADF is calling on government to invest $399 million across five election priorities detailed below.

ADF 2025 Election Priorities

Australian Dairy Farm Fund is a $120 million initiative aimed at supporting the next generation of dairy farmers. This fund will help new farmers purchase their first farm, transition into family operations, and invest in modern, sustainable infrastructure.

The fund specifically targets those with limited access to capital or cash reserves. Without this support, generational renewal will continue to fall, farm closures will continue, threatening Australia’s national milk supply and regional economies.

Australian Dairy Farm Efficiency Rebate offers up to a 70% rebate on eligible on-farm reinvestments aimed at improving resilience and adopting sustainable, energy-efficient technologies. Costed at $50 million program over three years, rebates will be applied to renewable energy systems (solar panels, wind and battery storage systems), energy-efficient equipment and machinery.

This tackles one of the biggest barriers to dairy farm sustainability and profitability—energy inefficiency. Rising energy costs are a major contributor to reduced sustainability adoption.

Supporting on-farm reinvestment ensures a more competitive, efficient, and future-proof dairy industry.

Dairy Industry Water Offset Program is a $200 million, three-year program dedicated to addressing water scarcity. This is a growing national challenge that poses significant risk to Australian dairy farmers, particularly in the Murray-Darling Basin and other drought-prone regions.

Key initiatives include investing in alternative water sources like aquifers, recharge systems, and recycled water to diversify supply. Strategic water entitlement returns from buybacks to farmers will ensure dairy farms in high-impact regions receive equitable and reliable water access. Developing dairy specific pipelines, pumping stations, and shared infrastructure will reduce losses and boost drought resilience. This program will also fund advanced water capture, storage, high-efficiency irrigation, and smart monitoring.

Dairy Farm Digital Adoption Program is a $15 million small grant initiative designed to fast-track the adoption of farm automation and digital solutions in dairy farm operations. Research shows 70% of dairy farms lack automation. This program provides grants for smart technology adoption, robotic milking, herd monitoring, and digital workforce tools.

These digital tools enhance workforce management, can improve on-farm safety, and help address critical labour shortages.

Australian Dairy Farmers Industry Services is a $14 million three-year program to strengthen ADF’s ability to deliver vital services to dairy farmers, including biosecurity, workforce support, and industry investment initiatives. As farmers face rising costs, labour shortages, tightening regulations, environmental pressures, and biosecurity threats, ADF’s industry good services and leadership is more vital than ever. With farm numbers declining and investment shrinking, strengthening ADF’s capacity to support dairy farmers is crucial.

For more information on our election package, click here.

By Nathan Pope, Policy Manager, Australian Dairy Farmers.

Economics & Trade

Watchdog delivers dairy advocacy win

March 6, 2025

One of the dairy industry’s major long-held wishes was realised last week, at least in part, with an announcement from Australia’s competition watchdog.

Increased scrutiny of supermarket conduct will be in the Australian Competition and Consumer Commission’s (ACCC) crosshairs next financial year.

That welcome announcement was included in the organisation’s compliance and enforcement priorities for the coming financial year, announced at a business event in Sydney.

It’s an outcome Australian Dairy Farmers (ADF) has long advocated for.

The focus comes at a crucial time as dairy farmers grapple with increasing costs of production and declining farmgate milk prices, while supermarket profit margins remain strong.

With Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasting a $740 million decline in milk production value, driven mainly by lower farmgate milk prices, the need for equitable treatment across the supply chain has never been more urgent.

The ACCC’s 2025–26 priorities include addressing anti-competitive behaviour and misleading pricing in the supermarket sector. This directly aligns with ADF’s call in the mandatory Food and Grocery Code of Conduct consultation.

ADF’s submission to the Treasury’s Grocery Code Review highlighted the inherent power imbalance between supermarkets and suppliers.

We successfully argued that a mandatory code would provide greater price transparency, enforce accountability on retailers, and protect farmers from unfair trading practices.

The ACCC’s commitment to now addressing supermarket market power confirms that our advocacy is delivering real outcomes for Australian dairy farmers.

ADF has long called for regulatory intervention to prevent major supermarkets from wielding excessive influence over pricing and supply arrangements. Our submission highlighted several key recommendations, including:

  • Making the Grocery Code mandatory to ensure compliance from retailers;
  • Preventing supermarkets from using milk as a ‘loss leader’ to unfairly attract consumers while squeezing supplier margins; and
  • Ensuring that retail pricing strategies do not result in further reductions in the price of raw milk paid to farmers, which risks accelerating the decline of Australia’s dairy industry.

The ACCC’s newly stated priorities validate ADF’s position.

The regulator has committed to investigating misleading supermarket pricing practices.

With Coles and Woolworths controlling around 65 per cent of Australia’s grocery market, their dominant position has long created uncertainty for dairy farmers trying to plan their businesses in a volatile environment.

The farmgate milk price has declined while production costs remain high, putting immense pressure on producers.

The ABARES report confirms that lower milk production values are primarily a result of falling farmgate milk prices, underscoring the urgent need for supermarket accountability and fair distribution of profits across the supply chain.

ADF will continue to work with the ACCC, Treasury, and government to ensure regulatory reforms benefit dairy farmers and secure a more sustainable future for the industry.

We remain committed to ensuring supermarkets engage in fair pricing practices that do not disadvantage dairy farmers.

We do this while also advocating for stronger enforcement mechanisms that hold retailers accountable for market manipulation, allowing dairy farmers to get on with delivering nutritious products to Australian consumers.

The ACCC’s shift in focus is a testament to the strength of strong, targeted advocacy.

However, this is just the beginning.

We urge policymakers to move swiftly in implementing good policy, done well. This will ensure all players in the dairy supply chain receive a fair share of returns.

For dairy farmers, fair competition is not just a policy goal – it’s a necessity.

By Paul Mumford, Trade & Economics Policy Advisory Group Chair, Australian Dairy Farmers

Economics & Trade, Farming operations

Processors profiting from low prices

January 2, 2025

By Ben Bennett, President, Australian Dairy Farmers

As a dairy farmer, it’s infuriating to witness the blatant disregard processors have for the backbone of this industry – us, the dairy farmers.

Recently, some processors announced modest increases in their farmgate milk prices. For Fonterra, as an example, this is less than a two per cent increase.

It’s a move the company’s dairy farmers in Australia were right to celebrate.

But there’s a blatant double standard at play in how processors set prices, which is clearly evidenced by the discrepancy between farmgate prices in Australia and New Zealand.

Across the ditch, last month Fonterra upgrade its mid-point milk price forecasts for suppliers in New Zealand to a record NZ$10 per kilogram of milk solids.

This equates to around AUD$9/kgMS in our currency. The co-op says this “reflects strength in the global market”.

As I write this, Global Dairy Trade’s (GDT) price index is up almost 14pc since early July.

Yet other processors drag their feet, refusing to pass on any benefits to the people who work so hard each and every day to produce the milk that keeps their operations afloat.

This is a complete double standard when compared to the lead-up to the current milk supply season.

In early 2024 the Australian Dairy Products Federation (ADPF) and processors were going to lengthy efforts to collectively manage market price expectations that prices should decrease in line with overseas prices.

They warned that milk price decreases were necessary due to lower overseas prices and pointed to New Zealand and the GDT as evidence.

Ironically, now as prices start increasing overseas in NZ and on the GDT we do not hear the same rhetoric or willingness to increase prices accordingly.

Instead, ADPF stated the need to “work together” and the importance of unity within the industry. But where’s this camaraderie when it comes to fair compensation?

Their rhetoric about collaboration rings hollow when processors prioritise their profits over the livelihoods of farmers. It’s a classic case of all talk and no action.

I have been vocal about the challenges we dairy farmers face, pointing out supermarkets’ aggressive pricing strategies, like slashing home-brand milk prices and the immense pressure on farmers, squeezing us out of business while retailers boast soaring profits.

Yet, processors seem content to let dairy farmers bear the brunt without offering any relief.

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) reported in its December Agricultural Commodities Report a staggering forecast of a $760 million loss in dairy production value in the current season.

Most of that drop directly relates to lower farm gate milk prices.

This isn’t just a number; it’s a devastating blow to our incomes, our families, and our communities.

While we’re left grappling with these losses, processors maintain their stranglehold on the industry, dictating terms and prices with little regard for farmers’ welfare.

If a loss of three quarters of a billion dollars was forecast in a financial year for any major Australian company, it would be all over the news and there would be calls for an investigation.

Yet this came and went with only Australian Dairy Farmers voicing concerns.

The power imbalance is glaring. Processors are the price-setters making decisions that impact our community’s livelihoods without any transparency or accountability, while farmers remain the price-takers.

Their reluctance to adjust farm gate prices, even modestly, underscores their market power and dominance.

Looking at the fundamentals that underpin this situation, the ABARES report suggests growth in global demand for dairy products will outpace global supply growth. Slowing production in China contributes to this picture.

Regardless of the cause, Australia’s dairy farmers know how supply and demand works.

It’s high time processors put their money where their mouth is. If they truly believe in working together, they must start by ensuring fair compensation for farmers.

Empty words won’t pay our bills or sustain our farms. We need tangible actions that reflect a genuine commitment to the wellbeing of the entire dairy industry, starting with those who are its very foundation.

Economics & Trade, Farming operations, People & Community, Policy & Advocacy

Strengthening ADF for Dairy Farmers

December 5, 2024

By Ben Bennett, President, Australian Dairy Farmers

It is an honour to continue to serve on the Australian Dairy Farmers (ADF) Board and to remain as President.

I was re-appointed by members at ADF’s Annual General Meeting (AGM) last week, along with fellow directors David Beca and Heath Cook.

Together, we stay committed to standing for the interests of dairy farmers across Australia and ensuring that their voices shape national policy decisions.

The AGM highlights the power of our united voice and the strength of our farmer-led organisation.

I would like to thank Andrew Aldridge, a Policy Advisory Group (PAG) chair and National Councillor, who stepped up to contest the election, making it a competitive process through his candidacy.

Dairy farmers like Andrew, who actively contribute their time and expertise, ensuring that ADF focuses on key issues impacting dairy farmers across Australia while also providing a succession pathway through the organisation.

PAGs undergoing a refresh
ADF is in the process of refreshing its Policy Advisory Groups (PAGs) to ensure they meet the evolving needs of dairy farmers.

This process aims to strengthen the PAGs so they can more effectively translate on-farm concerns into actionable policies.

PAGs have been, and remain, a vital link between the grassroots issues dairy farmers face and the national policies ADF advocates.

Through this refresh we’ve seen strong interest from the farming community, with a number of nominations received.

This response shows the value dairy farmers place on having their voices heard and shaping the direction of the dairy industry.

These nominations bring great perspectives and reinforce ADF’s foundation as a farmer-driven organisation.

This refresh also focuses on improving collaboration between PAGs, State Dairy Farmer Organisations (SDFOs), National Council and industry stakeholders.

By streamlining processes and improving communication, ADF strengthens its ability to respond to the big challenges the industry faces, from regulation to climate resilience and securing fair farmgate prices.

Tackling big issues in 2025
The year ahead presents significant priorities for ADF.

The review of the Dairy Code of Conduct stands out as a critical task.

Ensuring fairness across the supply chain remains essential to supporting trust and transparency between dairy farmers, processors, and retailers.

With a Federal Government election on the horizon, ADF continues advocating for policies that support the sustainability, innovation, and profitability of Australian dairy farms.

These priorities reflect the need for long-term solutions to address the challenges dairy farmers encounter daily.

ADF also focuses on supporting the global competitiveness of Australian dairy.

Rising production costs, access to reliable water supplies, and the need for clear labelling laws require immediate attention.

Labelling laws in particular play a vital role in protecting the integrity of dairy products and ensuring consumers can trust what they buy.

Encouraging dairy farmer engagement
At the core of ADF’s work lies a commitment to the dairy farming community.

ADF relies on farmers, advisors, and advocates to actively take part in shaping the industry’s future. ADF encourages all dairy farmers to get involved.

Join your local SDFO, take part in PAG discussions, and share your voice. ADF’s strength comes from the collective effort of the farming community.

By working together, we amplify the voice of Australian dairy farmers and tackle the issues that matter most.

Moving forward together
As ADF enters 2025, I remain committed to leading with determination.

The challenges we face as an industry are significant, but so is the resilience and ingenuity of dairy farmers.

The Board, National Council and PAGs, combined with the strong participation from dairy farmers, sets a solid foundation for addressing the road ahead.

Together, we ensure that ADF stays focused on delivering real outcomes for farmers.

Whether it’s addressing rising costs, advocating for fair prices, holding processors accountable or ensuring a seat at key policy tables, ADF continues to represent the interests of every dairy farmer in Australia.

Here’s to a productive and purposeful 2025.

By standing united and actively taking part, we strengthen our industry and secure a strong future for Australian dairy.

Economics & Trade, Farming operations, People & Community

Proposed super changes spark concern

November 7, 2024

By Ben Bennett, President, Australian Dairy Farmers

A government move to tax ‘unrealised gains’ has – quite rightly – ignited serious concerns among farming businesses, family enterprises, and small businesses across the nation.

In February 2023, the Australian Government announced plans to reduce superannuation tax concessions for individuals with balances exceeding $3 million.

This initiative aims to adjust the taxation framework of superannuation and is expected to significantly impact high-balance accounts.

The proposed legislation (Better Targeted Superannuation Concessions and Other Measures Bill) on unrealised gains—essentially taxing the increase in value of assets that have not been sold—could place undue financial burdens on dairy farmers.

Many of us rely on asset appreciation, particularly land value, for long-term financial stability and retirement planning.

As the National Farmers Federation (NFF) has warned – this unprecedented move could force farmers to sell parts of their farms to meet tax obligations, undermining the viability of family-owned agricultural enterprises.

It’s unfair and sets a dangerous precedent.

For farmers, whose assets are typically tied up in land and machinery, this could mean selling off parts of their livelihood just to pay a tax bill on paper profits that don’t translate into cash flow.

These apprehensions are echoed by several organisations, including the SMSF Association, the Tax Institute, the Financial Advice Association of Australia, and the Institute of Financial Professionals Australia.

They argue that taxing unrealised gains could have unintended consequences for investment and retirement planning, particularly affecting those who are asset-rich but cash-poor.

Clearly, Australian Dairy Farmers (ADF) supports this stance.

We’d like to see an immediate halt to the proposed superannuation changes, emphasising the detrimental impact they could have on dairy farmers.

Dairy farming, much like other agricultural sectors, involves significant investment in land and equipment.

The proposed tax could jeopardise the financial sustainability of these businesses, many of which are family-owned and operated.

As we know, dairy farmers already face tight profit margins and volatile market conditions.

Introducing a tax on unrealised gains would exacerbate these challenges, potentially leading to a reduction in investment in the sector and threatening Australia’s dairy production capabilities.

ADF welcomes the work of NFF in opposing the Bill, including its engagement with MPs and Senators, and their staff, as well as its collaboration with the Council of Small Business Organisations Australia (COSBOA) and the Family Business Association.

Together, they have developed a comprehensive document outlining their position, which has been distributed to lawmakers.

This united front aims to highlight the widespread concern over the potential impact of the proposed superannuation changes on small businesses and the agricultural sector.

The collective advocacy efforts have gained significant traction in the media and among policymakers.

The core issue lies in the nature of farming and small business assets.

Unlike liquid assets, such as stocks or cash, the value of farmland, equipment, and infrastructure is not easily accessible without selling the asset.

For many farmers, their superannuation is intrinsically linked to the value of their farm.

Taxing unrealised gains could force them to liquidate essential assets, disrupting operations and threatening the long-term viability of their businesses.

The proposed changes also raise concerns about intergenerational transfer of family farms.

With additional tax burdens, the ability to pass on the family business to the next generation becomes more complex and financially challenging.

This could lead to a decline in family-owned farms, which have been integral to Australia’s agricultural heritage and rural communities.

The NFF, ADF, and our allied organisations are calling on the government to reconsider the proposed changes and to engage in meaningful consultation with affected stakeholders.

We need policies that support the sustainability and growth of farming businesses and small enterprises, rather than imposing additional financial burdens.

In response to the growing opposition, some Parliamentarians have expressed willingness to engage in dialogue.

The hope is that through collaborative efforts, a more equitable solution can be found that addresses the government’s objectives without disproportionately impacting farmers and small business owners.

The debate over the proposed superannuation changes underscores the delicate balance between policy objectives and the practical realities faced by different sectors of the economy.

As the Bill moves through the legislative process, it is crucial for lawmakers to consider the far-reaching implications and to ensure that the voices of those most affected are heard.

It is imperative that policymakers carefully evaluate the proposed changes to avoid unintended consequences that could undermine the financial stability of farming industries and our hard-working dairy farmers.

The farming community and small business sector remain hopeful that through continued advocacy and engagement, the government will acknowledge these concerns and adjust the proposed legislation accordingly.

 

Economics & Trade, Farming operations

Drought plan must support fragile sector

October 3, 2024

By Ben Bennett, President, Australian Dairy Farmers

Dairy farmers in south-west Victoria, South Australia, Western Australia and Tasmania know all too well the immense challenge drought presents to the industry.

In these parts of the world, particularly south-west Victoria where farmers are battling the driest season on record, farmers are struggling.

So Australian Dairy Farmers’ (ADF) recent joint submission to the Department of Agriculture, Fisheries and Forestry’s (DAFF) consultation on the Australian Government Drought Plan is well timed.

Of course, the submission won’t make it rain and won’t deliver immediate change. But it does push to address the needs of dairy farmers.

Supporting the strong submission by the NFF, and prepared in conjunction with Dairy Australia, it calls for a number of essential changes to safeguard the dairy industry’s future.

Clear criteria in drought phases

One of the primary changes we outlined as important is the establishment of clear criteria for transitioning between the phases of the drought cycle.

The ambiguity around current definitions leaves a lot to be desired.

In south-west Victoria, farmers are experiencing the driest season on record yet aren’t considered to be in “drought”.

The lack of adequate recognition of the situation makes it too easy for governments and other institutions to believe it’s “business as usual”.

By specifying the environmental, economic, and social indicators that trigger each phase of the drought cycle, the government can ensure timely and consistent responses.

Recognising drought as a natural disaster

The submission strongly argues for the recognition of drought as a natural disaster.

Unlike other natural disasters, drought is a slow-onset event, but its impact on the dairy industry is no less devastating.

Dairy farming is uniquely fragile due to the high water and feed requirements of dairy cattle.

Establishing a threshold for recognising drought as a natural disaster would enable the provision of appropriate support to maintain animal welfare and milk production.

This change is crucial for preventing long-term productivity losses and ensuring the economic viability of the sector.

Emphasising evidence-based decision-making

Our submission emphasises the need for evidence-based decision-making in the government’s drought response.

The current approach lacks specific details on how government actions will be triggered by varying levels of drought severity.

By providing concrete examples and scenarios, the government can enhance transparency and preparedness.

This approach will also build trust with farmers.

Clarity on government support

We called for greater clarity on the specific actions the government will take during the ‘responding’ phase of the drought cycle.

Currently, the plan indicates that support is available at any time but lacks details on immediate measures to be implemented when drought conditions are identified.

Clear communication of these actions will help farmers understand what to expect and how to access the necessary support.

This transparency is vital for reducing the stress and uncertainty that farmers face during drought periods.

Enhancing coordination with state and territory support

Improved coordination between federal and state-level support is another critical change we proposed.

The current lack of coordination can lead to confusion and inefficiencies in drought relief efforts. This leaves farmers frustrated as they struggle to identify the right contacts and the appropriate times to discuss their situation.

By aligning federal and state measures, the government can ensure a more cohesive and effective response.

This coordination should also extend to the private sector, particularly the finance and banking industries, to ensure that support measures are timely and consistent across all levels.

Regular review and adaptation

The submission highlights the importance of incorporating mechanisms for regular review and adaptation of the drought plan.

Climate change is an evolving challenge, and the plan must remain relevant to address its impacts effectively.

Establishing a drought management advisory group could facilitate continuous assessment and adjustment of the plan based on new data and emerging trends.

This proactive approach will enhance the resilience and sustainability of the dairy industry in the face of changing climatic conditions.

Pushing for action

The changes proposed are not just recommendations; they are essential steps towards securing the future of the Australian dairy industry.

They reflect critical components of a robust drought plan.

Implementing these changes and those highlighted by the NFF, will provide the dairy industry with the support it needs to navigate the challenges of drought, ensuring its resilience and sustainability for generations to come.

Caption: ADF hosted Australia’s Minister for Agriculture, Julie Collins, at president Ben Bennett’s farm in early October.

Economics & Trade, Farming operations, People & Community

Dairy policy by dairy farmers

September 16, 2024

By Nathan Pope, Policy Manager, Australian Dairy Farmers 

Australian Dairy Farmers’ (ADF) commitment to farmer-driven policy is evident in the rigorous and responsive discussions held during our recent Policy Advisory Group (PAG) meetings. 

These meetings are not just routine; they are critical touchpoints where the experiences of our dairy farmers directly influence the policy direction of our organisation. The three PAGs are each led by dairy farmers. 

People and Communities PAG

Under Michele Lawrence, the People and Communities PAG has taken significant steps to address pressing issues impacting farms and communities. 

The decision to pursue ADF’s membership in FarmSafe was a key outcome of the group’s recent meeting. This move is particularly timely as the industry faces increasing scrutiny over farm safety practices.  

The membership allows ADF to leverage FarmSafe’s resources and expertise to enhance safety protocols across dairy farms, directly addressing the rising concern about workplace injuries and mental health challenges in rural areas. 

The PAG also discussed the working holiday maker visa review, highlighting the critical nature of this labour source for dairy farms, especially where seasonal labour shortages have been a persistent challenge.  

The group emphasised the need for ADF to advocate for visa conditions that are flexible enough to meet the demands of dairy farming while ensuring fair treatment for workers. 

In addition, changes to industrial relations laws, particularly those affecting casual and part-time workers, were scrutinised. The group expressed concerns about the potential impact on labour costs and the administrative burden on farm businesses.  

Farm Operations PAG 

The Farm Operations PAG, led by Andrew Aldridge, addressed several critical issues during its recent meeting, particularly in the context of emergency preparedness.  

A briefing from ADF’s water taskforce was a focal point of the meeting, with in-depth discussions on the implications of water policy reforms within the Murray-Darling Basin. 

There is concern among dairy farmers in that region about the long-term viability of their operations due to fluctuating water allocations and the rising costs of water. The taskforce provided updates on ongoing advocacy efforts, emphasising the need for a balanced approach that considers both environmental sustainability and the economic realities of farming.  

This briefing reinforced the importance of ADF’s role in lobbying for fair water distribution policies that support the dairy sector. 

The PAG also delved into antimicrobial labelling, with members noting the increasing consumer demand for transparency in food production. The discussion was framed around maintaining Australia’s high standards while avoiding unnecessary regulatory burdens that could disadvantage local producers in the global market.  

The group’s exploration of carbon trading and energy policy reflected dairy’s broader commitment to sustainability, recognising that these areas are not just regulatory challenges but also opportunities for the dairy industry to lead in environmental stewardship. 

Trade and Economics PAG 

Under Paul Mumford, the Trade and Economics PAG tackled several strategic issues with significant implications for the future of the Australian dairy industry.  

The announcement of Indonesia’s policy to provide free milk in schools was identified as an opportunity for Australian dairy exports. The group discussed how this policy could open new markets for Australian dairy products, particularly given the strong trade ties and the existing framework of agreements between Australia and Indonesia.  

The PAG recommended a proactive approach to engaging with Indonesian authorities, government and local dairy stakeholders to secure a significant share of this market, emphasising the need for competitive pricing and high-quality standards to meet the expected surge in demand. 

The declining milk pool was another critical issue on the agenda, with group analysing the factors contributing to this trend.  

The discussions were informed by data showing that rising input costs, changing consumer preferences, and increasing competition from plant-based alternatives are all exerting downward pressure on milk production.  

Members stressed the importance of policy interventions to reverse this trend, including measures to support farm profitability. 

National Council – bringing PAG outcomes together 

ADF’s National Council has met twice in recent months. Its purpose is to synthesise the outcomes of the three PAGs. 

These meetings were significant events, particularly in light of the upcoming reviews of Dairy Australia. These are important for the industry, as they will shape the strategic direction and effectiveness of our key research and development body.  

The council also reviewed updates on the Australian Dairy Sustainability Framework – a key initiative that tracks the industry’s progress towards achieving sustainability goals.  

The discussion highlighted the need for continued efforts to promote sustainable farming practices that are both environmentally sound and economically viable. The council emphasised sustainability is not just a regulatory requirement, but a core component of the industry’s value proposition to consumers and markets. 

Each of these five meetings helps inform ADF’s policy development process, driven by the insights and recommendations from our grassroots members.  

They help ADF advocate for policies that support the long-term success and sustainability of the Australian dairy industry. 

 

Caption: Australian Dairy Farmers’ three Policy Advisory Groups each met recently, along with two meetings of its National Council (pictured).  

Economics & Trade

ADF statement on live sheep export ban

July 8, 2024

Australian Dairy Farmers statement regarding the passing of legislation through the Federal Parliament to end live sheep exports:

Australia’s peak representative body for dairy farmers stands united with the livestock sector in opposing the Federal Government’s ban of live sheep exports by sea.

While the decision directly concerns live sheep exports, Australian Dairy Farmers (ADF) says the ban exposes a number of other sectors and international trade partners to significant trade risk.

This risk extends to the dairy industry and has the potential to adversely impact Australia’s dairy farmers.

ADF is concerned the views of a small segment of the Australian community has been empowered through Government policy and imposed on international cultures and trading partners. Australia is well placed to feed the world. We can’t do this with ill-informed Government policies based on emotion over fact.

Economics & Trade, Policy & Advocacy

Time to come clean on code claims

March 8, 2024

By Ben Bennett, ADF President

They say transparency builds trust.

It’s curious then that some processors and their representatives in the dairy industry have been calling to expedite a scheduled review of the ACCC Dairy Code of Conduct without clearly articulating their reasons.

All the more curious given the timing, when we have competitive milk prices (which are set by the processors themselves and the marketplace).

It’s even more curious given some of the recent misinformation in the media, suggesting the code is responsible for high retail dairy prices, and that this is in effect driving a high cost of living, as well as exacerbating the differential between high domestic prices and cheap imports from overseas.

All this suggests that processors are feeling price risk pressure and that it is the code itself that is protecting farmers from this risk being passed down the supply chain in the form of price step-downs this season.

Could it be that processors would like to see the floor price removed from the code? Could it be that they are opportunistically using media around the cost-of-living crisis and the government’s subsequent supermarket inquiries to lobby for an earlier review of the code?

Let’s be clear, it is the processors themselves who have bid-up the price of milk to secure supply in the current market. This is the marketplace at work.

The code does not set the price. It provides the rigour around commercial contracts in the form of milk supply agreements.

Processors are required to honour the minimum price they themselves set after they have locked in a contract with the farmer. The processor can increase prices, and in certain exceptional circumstances, if justified, they can also decrease prices.

As the Australian Competition and Consumer Commission (ACCC) has stated, the code is the thing that “imposes minimum standards of conduct on processors and dairy farmers”.

These standards are needed. We know that’s the case, having lived through previous claw-backs and the subsequent impact on the industry. These led to farms leaving the industry and the declining milk pool, which is now ironically coming home to roost as processors compete for that reduced milk supply.

The Australian Dairy Products Federation (ADPF) commenced the campaign with its executive officer in The Weekly Times advocating that “a further three-year delay (on reviewing the code) is simply unacceptable”.

Yet more articles in mainstream urban press have attempted to tarnish the code as a mechanism that inflates prices. We’re now hearing some processors openly push to have the review of the code brought forward.

In an interview on ABC radio, the CEO of one processor was asked for their take on reviewing the code.

They implied the code wasn’t working for all parties, however couldn’t, or wouldn’t, stipulate what exactly he thought was broken.

The processing company in question received a significant fine last year for breaching the code. After the Federal Court finding, the ACCC Chair commented: “We took action because we considered (the processor’s) conduct would reduce transparency in the industry and served to perpetuate systemic bargaining power imbalances between processors and farmers.”

However, neither the processor in question nor the ADPF have articulated why they believe the codes should be reviewed, or why it isn’t working.

Presumably, processors weren’t feeling the price squeeze during the first review to the same degree as they are now.

Regardless, Australian Dairy Farmers (ADF) would like to see processors treat the rest of the industry with respect and engage in good faith when calling for the review of the code to be brought forward.

It’s time to come clean and be transparent!

After all, if it’s so urgent, we deserve to know the underlying reasons.

Is it simply because they want the floor price for milk withdrawn, making it easier for them to drop prices mid-season? Anyone who was dairying in 2016 will remember where that can end up.

Been here before

The code only came into effect just four years ago and has already been reviewed once in late 2021. This review, a separate Senate inquiry into the dairy industry and the ACCC Perishable Goods Inquiry found no evidence of reduction in competition arising from the dairy code.

In fact, they validated its appropriateness with only minor changes recommended. The second dairy code review has been deferred to allow changes from the 2021 review to take effect.

All parties were consulted and had opportunity to provide input during the last review. Plus, the Department of Agriculture, Fisheries and Forestry is already calling for input on the coming review.

Let’s remember that the code does not set prices. It provides rigour and protection for farmers.

Having considered all this, ADF believes the coming review should be completed. Not least to fulfill legislated obligations. However, there’s no need to bring it forward.

The code is protecting dairy farmers, bringing transparency to the market and addressing power imbalances.

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