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.

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.

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.

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).