By Ben Bennett, President, Australian Dairy Farmers

One of the active ingredients in popular mastitis treatment Mastalone is under threat, and Australian Dairy Farmers (ADF) is proactively defending farmers’ access.

Australia’s agvet chemical regulator, the Australian Pesticides and Veterinary Medicines Authority (APVMA), is reconsidering the registration of the antibiotic neomycin – one of the key components of Mastalone.

In real terms, this means the sale of Mastalone could be banned simply because of, as APVMA puts it, a lack of data to enable it to assess potential risks to trade from chemical residues.

ADF has made a submission to APVMA outlining the importance of this veterinary chemical product to dairy production in Australia.

As the national representative body for dairy farmers across the six dairying states, ADF’s mission is to improve the productivity and sustainability of dairy farmers in Australia. Critical to this mission is to maintain and improve Australia’s animal health and welfare systems.

The proposed decisions, if implemented, would change the conditions of registration and/or cancel the registration of Mastalone and other vital products.

In our submission on behalf of Australia’s dairy farmers, we reminded APVMA that mastitis is a painful disease, causing significant animal welfare and economic losses on every dairy farm, and that deregistration of this product would have a counter-intuitive impact on production and animal welfare.

Australian dairy farmers must be able to use Mastalone because it contains ingredients (Oxytetracycline, Oleandomycin and Neomycin) that are not available in other registered intramammary products and cover a broader spectrum of mastitis pathogens compared to other products.

Importantly, these medicines are of low importance to the development of human antimicrobial resistance.

Therefore Mastalone provides an important alternative product to other intramammary lactating cow products that contain beta-lactam active constituents. Dairy farmers need both tools in their toolkits to ensure their animals remain healthy and don’t develop resistance to either category of antibiotic.

ADF appreciates the APVMA’s responsibility to assess the efficacy, safety and risks to trade.

But we think it is deeply unfair that APVMA would propose to cancel the registration of Mastalone primarily due to a lack of data.

Mastalone has been used under veterinary prescription by dairy farmers in Australia for over 50 years. The industry has a very long, recorded history of successfully managing the risks of antimicrobial residues in both milk and meat products traded domestically and around the world.

Overall, the Australian dairy industry has a very low use of antibiotics compared to other countries.

We are proud of our industry’s efforts to use antibiotics sparingly and correctly, through which we minimise the risk of antibiotic resistance and protect our international reputation.

Through the Australian Dairy Sustainability Framework, the industry has committed to use antibiotics responsibly, as little as possible, as much as necessary, to protect the health and welfare of our animals.

Of its own volition, and through government systems, the industry has been monitoring for antimicrobial residues in its products for many years. If Mastalone posed a significant risk to consumers or trade it would have been identified through the industry’s established and robust chemical residue risk management procedures and brought to the attention of the ADF, Dairy Australia and food safety regulatory authorities.

We support the ongoing registration of this vital product.

I’m feeling confident about the future of the Australian dairy industry. Yes, there are a lot of issues affecting us, such as the lingering impact of drought, production costs, discount dairy products, the misleading labelling of non-dairy alternatives as “milk”, and shifts in the global market.

But if there is one thing the COVID-19 pandemic has showed us, with all the panic buying that occurred earlier this year, it is that dairy will always be a staple household item.

And it appears confidence is rising across the industry. The National Dairy Farmer Survey, conducted annually by Dairy Australia, has confirmed that farmer confidence in their own businesses and the future of the Australian dairy industry as a whole has risen over the past 12 months.

While overall confidence remains lower than in 2018 and 2017, 44 per cent of farmers reported feeling good about the future of the industry. This is a marked improvement from last year, when just 34 per cent felt positive about the industry’s future in the survey’s worst ever result, but still far below the historic high of 78 per cent recorded in the 2008 survey, before the Global Financial Crisis.

Even more encouragingly, more than two thirds of farmers surveyed (67 per cent) reported feeling positive about their businesses, a massive 22 per cent jump from last year. This is the highest level reported since Dairy Australia started measuring own business sentiment in 2017.

We can feel buoyed by the fact that there has been an improvement in farmer sentiment on every score since last year, when the ballooning cost of feed and water eroded farm profitability despite stronger than average opening milk prices.

Nearly two thirds of farmers surveyed in 2019 said they were concerned about the cost and availability of feed, while just 43 per cent expect to make an operating profit.

Encouragingly, 70 per cent of farmers surveyed this year expected to make a profit, while 48 per cent of farms anticipated an increase in production volumes for the year ending June 2020.

Significantly more farmers in all but one region reported that they were expecting higher profits in 2020 than have been achieved on average over the past five years. Unsurprisingly, regions with the largest share of profitable farmers also reported the highest levels of confidence in their own business.

All of this comes even as prolonged drought, bushfires and high feed and water costs continued to be major concerns prior to the survey. It seems that farmers are ready to invest in their businesses, buoyed by a favourable start to the season.

As has been reported, these statistics show a dairy industry in recovery, although it is unclear whether this confidence will continue to grow in a post-pandemic environment.

What has been confirmed by Dairy Australia’s June Situation & Outlook Report is that demand for dairy remained strong during the panic buying that accompanied the COVID-19 pandemic.

But while farmers are feeling more positive about their individual businesses, there has only been a modest boost in confidence since last year for the future of the industry. Last year, just 34 per cent of farmers surveyed felt optimistic about the industry’s future – the worst result in the survey’s history.

While there has been a 10 per cent jump in overall confidence this year to 44 per cent, there is still a long way to go before we can approach pre-GFC levels of confidence.

That is the challenge facing the Australian Dairy Plan. A confident industry is one of the Dairy Plan’s key objectives, with a goal to boost milk production up to 9.3 billion litres per year by 2024-25. This would generate more than $600 million annually in extra value at the farm gate and stimulate the growth of at least 1,000 direct new jobs, mostly in rural and regional areas.

There are a lot of factors involved in sustaining a confident industry. But if the trend in farmer confidence continues, I have no doubt that we will go a long way towards achieving our goal over the next five years.

ADF welcomes the opportunity to respond to questions around our recent Dairy Insight column in the Stock & Land and other newspapers.

The situation facing farmers in the Murray Darling Basin must be addressed before we lose more farmers. Fodder and water are trading at untenable prices
and we recognise the impact at the family, farm and community level.

All dairy farmers can rest assured that ADF continues with its proud 77 year history of passionately representing the interests of dairy farmers.

The objective of the column was to share a view that drought is the major factor impacting on basin communities, including of course dairy farmers.

ADF has a long-standing position not to abandon the Murray Darling Basin Plan.

We have stayed firm in fighting to stop the federal government from buying back water once 1500GL has been recovered, as stated in the Water Act.

We have also urged that any plan to drain an extra 450GL from the Basin for the environment must be viewed as a last resort and only if there are neutral
or positive, NOT negative, socio-economic impacts. This means a cost-benefit analysis and consideration of any future effects on communities.

ADF has also supported the ACCC investigation of the water market to validate assumptions of water use along the Murray River system, including irrigation
and environmental demand and the impact of constraints, and to ensure greater transparency in water trading.

The Murray Darling Basin is home to around 1,330 dairy farm businesses with a value of production worth more than $2.6 billion, supporting over 3,000 direct
jobs in the region. Dairy sits at the heart of the Basin community.

ADF continues to urge state and federal governments to consider any impacts the Basin Plan may have on dairy jobs and local communities.

But while this is paramount, we also urgently need an agreement between commonwealth and state governments to provide a national approach to drought preparation,
response and recovery.

Angst in Murray Darling Basin over skyrocketing water prices is now at fever pitch.

Many groups are advocating for change to the Basin Plan. The Victorian Nationals want to terminate the additional 450 gigalitre (GL) recovery target. Some
farmer groups in the Southern Riverina and northern Victoria want the plan paused or their state governments to withdraw. Members of NSW Farmers Association
passed a motion at their July conference to lobby the federal government to hold a Royal Commission into the Basin Plan.

But while such decisions are being made in response to issues with the Plan, especially an assumption that it is responsible for many areas of the Basin
now having zero water allocation, a solution is not as simple as pausing the Basin Plan.

The dairy industry has largely supported the Basin Plan, mainly because it is underpinned by science and economics. A plan that ensures a balance between
irrigation and water required to maintain river, wetland and floodplain health is not just necessary, it is good policy.

The Australian Dairy Industry Council (ADIC) has argued through countless submissions to government that for the Basin Plan to have the most impact, the
acquisition of water for environmental use must always be rooted in scientific and economic evidence.

Not only that, but the government must also ensure an open and efficient water trading market, coordination between water recovery programs such as irrigator
buybacks and infrastructure reform, respect for individual property rights, and consultation with affected communities.

Investors, especially, have copped blame for driving up the price of water in an already stressed market.

In recent months, horticulture groups have urged Minister Littleproud to put a temporary ban on investors buying water and holding on to it for the next
year. The government responded by announcing the Australian Competition and Consumer Commission (ACCC) will investigate markets for tradeable water
rights in the Basin.

The ADIC has not joined this push to ban the Basin Plan or investors. Water policy experts, including Aither, have found the market to be working effectively
and that high prices are the result of high demand and low supply caused by persistently dry conditions and below average rainfall.

Ultimately it is the devastating impact of drought that is most responsible for rising water prices.

Over the past 30 months, many parts of the Basin have received the lowest rainfall on record, particularly around the Border Rivers – a trend that is set
to continue in 2019-20 given the Bureau of Meteorology’s forecast of below average inflows.

It is important to remember that water prices during the Millennium Drought in the early 2000s, prior to the Basin Plan, were significantly higher than
they are now.

For most of that dark period allocation prices in the Southern Basin were over $500 per megalitre (ML), while in June 2007 it peaked at a whopping $1,400/ML
in the Murrumbidgee.

To put this in perspective, the Australian Bureau of Agricultural and Resource Economics (ABARES) is predicting an average annual water price of $473/ML
in 2019-20 for the Murray trading zones.

While this is not good news, the best chance to increase water availability and lower water prices in the Basin is for the federal government to get behind
large scale water supply projects to safeguard industries and Basin communities from drought and decline.

The ADIC has requested the government to commission the CSIRO to develop a transformational water supply blueprint for Australian agriculture.

The government, meanwhile, has announced the development of a National Water Grid to bring together water experts, scientists and economists to look at
how large-scale water diversion projects could deliver reliable and cost-effective water to farmers and regional communities.

Ultimately, it is not the answer to simply abandon the Basin Plan. The dairy industry, together with the National Farmers’ Federation, other farmer groups,
and federal government, are working to relieve pressure on irrigators while ensuring a healthy river system.

– Terry Richardson, ADF President

Australia’s climate change policy has revolved around whether the climate is changing, to what extent has it been human induced and the country’s response,
by way of an emissions reduction target. These issues were front and centre during the election campaign, with all political parties providing the
electorate with vastly different policy approaches to consider. The problem with this debate is it has focused narrowly on what Australia is doing.
It has completely ignored the role of other nations and Australia’s role in influencing their positions, in particular those countries who are underperforming
or not participating.

• Cumulative Gross Domestic Product (GDP) loss of $62 billion under the 26-28 per cent scenario versus $472 billion under the 45 per cent scenario. This
  is a significant impact given the total size of the Australian economy is $1.3 trillion.
• Real average wages to decrease $2,000 per annum under the 26-28 per cent scenario versus $9,000 per annum under the 45 per cent scenario.
• Full time job losses of 78,000 under the 26-28 per cent scenario versus 336,000 under the 45 per cent scenario.
• Electricity prices, which are already at excessive highs, to increase $93/MWh under the 26-28 per cent scenario versus $128/MWh under the 45 per cent
  scenario.

Australians will head to the polls on May 18 to cast their vote for who will govern the country for the next three years.

– Terry Richardson, ADF President

The dairy industry is in the fight of our lives on a number of fronts. While the drought continues, fodder and water are trading at record or near-record
prices.

– Terry Richardson, ADF President

The dairy industry has been crippled by the debilitating effects of $1-a-litre milk for more than eight years.

But now Woolworths has raised the price of its $1 per litre milk to $1.10, with the extra 10 cents to go, in full, directly back to farmers, there is for
the first time hope that we can beat this destructive pricing strategy.

This is a major victory and Woolworths should be congratulated for making the difficult, but right decision to ensure farmers get a fairer return for their
tireless work.

However, while we may regard this as a step in the right direction, it is certainly not the end of the battle against discount dairy.

Other supermarkets have so far refused to follow Woolworths’ lead. Coles has proposed a government mandated industry-wide levy, while Aldi has so far rejected
all calls to raise the price of its discount milk line, which retails for 99 cents-a-litre.

This sends a negative message to our farmers about the worth of their work and their product – especially when the major retailers have just raised the
price of bread due to high grain prices.

Coles, without a mechanism to ensure an increase in the discount milk price would go directly to farmers, has instead offered to collect donations at their
checkouts.

This suggestion is just another slap to their suppliers. Any suggestion by Coles that they can rattle the collection tin for struggling farmers shows how
out of touch they are. Farmers don’t want a handout. They run businesses and like all business owners, farmers want a fair price for their product.

Farmers are currently suffering through a severe drought, with production costs skyrocketing due to high grain, hay and water prices.

Supermarkets cannot continue selling cheap milk while simultaneously raising the price of other products to help drought-stricken farmers.

The last Dairy Australia National Dairy Farmer Survey, conducted in 2018, found farmer confidence in the future of the dairy industry has dropped from
75 to 47 per cent over the past four years.

Removing $1 milk will help restore farmers’ financial confidence, and also boost confidence in regional communities and small businesses.

Farming families put tireless effort and resources into producing a quality product, day in and day out, and to see it devalued to the consumer has a deep
and lasting impact.

Most shoppers are aware of how difficult the past few years have been for the dairy industry. We have been heartened by the outpouring of support from
all Australians, wanting to know which brands they can buy to support farmers.

The latest Dairy Australia Situation and Outlook report attributed a trend of declining farm profitability to soaring productions costs combined with relatively
steady milk prices.

Dairy Australia is forecasting national milk production in 2018/19 will fall below 9 billion litres for the first time since the mid-1990s, in another
blow to industry confidence.

It is clear something must change to reverse this trend of decline, and the retailers have an opportunity to come to the table and help us implement a
solution.

If more farmers leave because their milk price doesn’t reflect their high production costs, there will be a real danger of Australia soon not having a
dairy industry.

– David Inall, Australian Dairy Farmers CEO

Australia needs to stand up to the European Union and ensure our local dairy industry doesn’t suffer under a new free trade agreement.

The federal government is clearly enthusiastic about the prospect of securing a $100 billion trade deal.

Prime Minister Scott Morrison went so far as to pledge to “accelerate” negotiations for greater Australian export access into Europe at last year’s G20
leaders’ summit.

But as part of the negotiations, that started in mid-2018, the EU is pushing for Australia to accept and implement strict labelling rules that could spell
disaster for our dairy industry.

Called geographical indications (GIs), the stated purpose of these rules is to “protect distinctive EU food and drink products from imitations in Australia”,
but in practice imposing such restrictions poses a grave threat to existing locally produced dairy products.

Such a move could see a ban on locally produced Feta, Parmesan, Haloumi and eventually Greek Yoghurt.

Dairy producers will be forced to change the names of these products and consumers will be confused and frustrated at no longer being able to find some
of their favourite dairy products on supermarket shelves.

Not only that, but European negotiators are also arguing to extend the scope of GIs beyond the name of products to include colours, flags, symbols, script
or anything that might evoke the source of a product.

A quick look in any supermarket cheese section will show you that many Australian dairy manufacturers have built their brands on their cultural heritage,
and now face the possibility of having that taken from them.

This is a nightmare scenario we cannot let play out.

Australia has a prominent dairy sector, worth $4.3 billion at the farm gate alone, and is still the country’s third largest agricultural industry.

We produce over 22,000 tonnes of cheese varieties that are of risk each year, with a value of production equalling more than $180 million per annum and
export sales averaging over $55 million.

And alarmingly, the EU wants to reserve the right to add names to the GI list in the future.

Greece is currently applying to have the term ‘Greek Yoghurt’ protected as a GI.

This is just a taste of things to come if Australia allows GIs to be included in a trade deal with the EU.

The dairy industry does not oppose the concept of GIs that are linked to a specific place, but we do have concerns with restricting common food names –
for example, the use of Camembert as a common name, in comparison to Camembert de Normandie, which is clearly linked to Normandy in France.

A further 45,000 tonnes of local cheese production, averaging $300 million in domestic and export sales per year, could face future restrictions on production
and sale if strict GI evocation rules are applied under the FTA.

It is vital that the free trade agreement has benefits for both sides, considering the ease of access European dairy manufacturers have to the Australian
market.

These trade negotiations should allow both Australia and the EU to capitalise on an improved commercial relationship.

But we need to ensure this deal frees up the trade relationship rather than creates technical barriers such as GIs.

The future of the Australian dairy industry depends on the federal government’s courage to stay firm in trade negotiations and push back against the EU’s
demand to enforce GI restrictions.

– Terry Richardson, ADF President