When Australia’s largest dairy processor and farmer co-operative Murray Goulburn announced in April 2016 that it was slashing the farmgate milk price in
an attempt to claw back $183 million it had already paid to suppliers, the dairy industry was plunged into a deep crisis.

Farmers were rightly outraged that the industry became paralysed by events that were seemingly preventable.

The Australian Competition and Consumer Commission (ACCC) took action against the processor in the Federal Court for making false or misleading representations
to farmers that it could maintain its opening milk price of $5.60 a kilogram milk solids and a forecast final milk price of $6.05/kg MS when in fact
this was not sustainable.

But while Murray Goulburn admitted to this breach of the Australian Consumer Law, which at the time carried a maximum fine of $1.1 million, the ACCC elected
not to pursue a financial penalty because as a farmer co-operative, any penalty would likely end up being paid by the very people who were hurt by
the company’s actions in 2016.

Instead, the blame was dumped squarely at the feet of former managing director Gary Helou, who copped a $200,000 fine for being “knowingly concerned” in
Murray Goulburn’s false or misleading claims about the farmgate milk price.

He must also pay $50,000 to help cover the ACCC’s legal costs and has been banned for three years from any involvement in the dairy industry.

This outcome should have brought closure to the farmers whose livelihoods were affected by the milk crisis.

But instead, new questions are being raised over the strength of penalties meted out for misleading suppliers and the need for greater information sharing
in ensuring robust accountability processes.

Some farmers have reacted angrily to a $200,000 fine which appears to pale in comparison to the $10 million Mr Helou reportedly pocketed during his tenure
at the helm of Murray Goulburn – especially when the co-op’s former unitholders have been ordered to pay the ACCC’s remaining legal costs, also amounting
to $200,000.

Farmers are valid in their anger, considering the impacts of the milk crisis on their own businesses and the whole industry.

But we must remember that at the time the ACCC intervened, the maximum fine that could be imposed on an individual for this breach of the consumer law
was just $220,000.

This has subsequently been increased to $500,000 under new legislation, but the door is open to discuss whether penalties imposed for breaches of the consumer
law and Corporations Act are a sufficient deterrent for executive wrongdoing.

We must consider how these penalties improve governance processes, provide accountability and maintain the trust between farmers and their processors that
is vital for success.

The Murray Goulburn saga reinforces the need to maintain high standards of corporate governance. Anyone who wants to retain a position on a company’s board
of directors must be prepared to be held ultimately accountable.

The dairy industry’s primary goal in the past three years has been to ensure that another governance catastrophe never happens again.

Australian Dairy Farmers, as the peak dairy farmer body, has done its best to bring the industry together behind measures that will help repair relationships
across the supply chain.

The Federal Government is now moving closer to implementing a mandatory code of practice for the industry.

There has been intense community interest for the health and well-being of farmers.

It is encouraging to know that Australians who aren’t involved in the dairy industry understand the stresses caused by the events of 2016.

The dairy industry needs closure and we are trying to achieve that outcome.

The recent judgment against Murray Goulburn’s former management is another step towards repairing trust.

The loss of the Murray Goulburn co-op – which for nearly 70 years was the cornerstone of the Australian dairy industry – continues to cast a long shadow
over the industry.

We must take seriously the lessons learned from the 2016 milk crisis so that we can genuinely rebuild trust between farmers and processors and repair once
strong relationships.

– Terry Richardson, ADF President

It has been a big year for the dairy industry and ADF – sometimes difficult, but often rewarding. I want to reflect, in the final Dairy Insights for the year, on some of the significant moments from the past year.

The industry lost Murray Goulburn, which for nearly 70 years has been a bedrock of the Australian dairy industry – our biggest farmer co-op and our largest
dairy processor.

The sale of Murray Goulburn to Canadian dairy company Saputo has no doubt changed the dairy landscape forever and the industry is still coming to terms
with this event.

ADF led an industry discussion on the code of practice. Working under the auspices of the ADIC, we reviewed the voluntary code of practice and, through
consultations with our state dairy farmer members, developed draft clauses to be incorporated into a new code of practice being implemented by the
federal Government.

The Government is now using the ADIC work as a foundation to engage farmers in consultations around what they want in a mandatory code of practice.

We called for a change to the federal Government’s skilled worker visa system. We told the Government that the job of dairy farmer needs to be upgraded
from an unskilled occupation to skilled. Not only that, but we argued that the visa systems should provide skilled workers with access to longer visa
period and a pathway for permanent residency.

This is important because the industry is losing too much money – up to $364 million per year – due to labour shortages. The dairy industry employs more
than 40,000, but we will continue to suffer if we can’t gain access to skilled labour.

This year we pushed for the Murray-Darling Basin Plan to include a socio-economic test that is fair for all farmers. Dairy communities cannot tolerate
any further job losses or having to pay for increased temporary water costs due to less water being available. We advocated for a test that will deliver
neutral or positive benefits for Basin communities.

We have also maintained an active policy focus on key areas such as animal welfare, trade and market access, biosecurity, and social licence.

But despite the achievements of this year, there is still much work to be done. This has been a watershed year for the dairy industry. I also want to highlight
some of our priorities going forward.

Collaboration is vital between ADF, the state dairy farmer organisations, our industry services body Dairy Australia, and indeed across whole dairy value
network.

With the departure of our major co-operative the role of industry leadership falls fairly and squarely with farmers through their representative and service
bodies.

There is no institution to provide weight to the farmers voice. That will only come with farmers speaking as one.

We are not in competition with one another at the farmgate, and there can be no reason to depart from the original purpose of ADF “to promote the interests
of the dairy farmers of the Commonwealth in all matters affecting them.”

To do this requires we engage in the painstaking work of building consensus. There will always be gaps and ambiguities, but is our greatest advantage in
acting alone or together in the long-term interest of the industry?

We also need to seriously consider greater investment in leadership opportunities. We must have open and honest discussions about the future of dairy advocacy.

Farmers should have greater ownership over the achievements and opportunities in the industry, and we need to develop opportunities to engage the next
generation and harness their passion for the dairy industry.

Looking ahead, it is important to keep in mind that while we are an industry that has been under intense pressure, we are also an industry that has the
know-how and resilience to overcome adversity and thrive in the long term.

– Terry Richardson, ADF President

This season on my farm we are paying $470 a tonne for grain. Last year we paid around $280/t but that’s a sign of how tough things are, and how the current
drought is affecting all farmers. Others I know are doing it tougher.

Prime Minister Scott Morrison has toured drought-affected regions and convened a summit to talk tactics on getting through the current drought and preparing
for the future.

Any opportunity to make drought preparedness a government priority cannot be squandered. We urgently need an agreement between commonwealth and state governments
to provide a national approach to drought preparation, response and recovery.

Unfortunately, there isn’t much chance of this drought lifting, despite recent rainfall acros some parts of the country. Australia just experienced the
driest September on record and the Bureau of Meteorology is predicting a 70 per cent chance we will soon be hit with an El Nino event.

Fodder remains scarce and water prices have continued to surge. Farmers are now looking to secure new season hay for their livestock, which has pushed
up demand. The result is near record price hikes.

Worryingly, prices will most likely rise further as demand for feed continues to come from across the country, outstripping supply. This means that securing
long-term supplies of new season hay could be an issue.

Some farmers are resorting to alternative feeds such as sorghum stubble and cane tops. But with crops like canola being cut for hay and silage, farmers
should be cautious and get feed tests.

Water prices are also a point of concern. Both northern Victoria and Murray water prices are at record highs. In northern Victoria, prices have skyrocketed
by 202 per cent since last year despite less water being traded, down 53,770 megalitres (ML). The average price reached $321/ML in September, the highest
since 2009. Demand continues to grow as tight supply is driving the price up.

The Murray irrigation area has a similar position – the average price recorded in September was $351/ML, up 179 per cent from the same time last year,
despite the amount of water being traded decreasing by 22 per cent. The current price trend is being driven by lack of rain and reduced inflows. Our
main concern is that if all weather forecasts prevail, there will be no respite from the high prices.

There has been little rainfall and drought conditions have only intensified. Unfortunately, this appears set to continue with the Bureau of Meteorology
now indicating eastern Australia will likely remain dry.

Queensland, Tasmania, Victoria, eastern South Australia and southern New South Wales are all expected to have below average rainfall, while Western Australia
has about an equal chance of exceeding the median rainfall. The above average temperatures are likely to remain to at least the end of 2018. These
conditions will continue to pose challenges to producers currently affected by drought.

I would encourage farmers to use the different drought assistance packages being offered by state and federal governments. Information about all these
initiatives is available on the relevant government websites.

Dairy Australia is also a valuable resource for information and advice on managing drought preparedness. The latest Situation and Outlook report is out
this week and paints a more complete picture of seasonal conditions and critical factors for farm performance.

Many are calling this the worst drought in living memory. We’re all praying for rain, but with no end to the drought in sight, we must be realistic about
our options and talk seriously about safeguarding against future droughts.

Dairy farmers aren’t just part of a broad industry; we are a community. Don’t be afraid to seek advice, talk with others and be aware of others who may
need support.

– Terry Richardson, ADF President

For nearly a decade, dairy farmers have been wearing the pain caused by discounted products, whether it’s $1 per litre milk or cheap cheese.

I remember when the first $1 per litre products went on supermarket shelves on Australia Day, 2011 and the outrage caused by the resultant “milk wars”.

Prior to this marketing campaign, the last time milk was $1 per litre was around 1992. But in 2018, it’s impossible to live on a wage set at 1992 levels.

Now there is momentum to turn things around and give value back to the dairy supply chain.

Some supermarket chains have announced plans to help drought-affected dairy farmers.

Woolworths plans to introduce a special range of milk priced at $1.10 per litre in mid-October. Homebrand 2L and 3L milk products are currently on shelves
for $1.10 per litre until the drought-relief milk product launches.

Coles is now selling its 3L Own Brand milk products for $3.30, with the money collected to be distributed back to farmers via a fund with an application
process.

Both have been upfront about the fact that their initiatives are only short-term measures that aren’t intended to solve the problem of discounted dairy
products.

As President of Australian Dairy Farmers, I represent farmers all across the country. Many are calling me asking how they are eligible to receive a fair
price from either of these plans.

The problem with both plans is that many regions of Australia affected by drought with high production costs impacting thousands of dairy farmers, yet
most of those farmers won’t be able to claim a benefit from either initiative.

Coles has encouraged any dairy farmers to apply for a grant through their fund, but those in drought-declared areas will be given priority, while

Woolworths intends to distribute the extra 10c from their drought-relief milk back to farmers via their processor.

While I support measures that see farmers paid a reasonable price for their hard work and dedication, I must ask, “Is this really the best we can do?”

Certainly ADF and our state dairy farmer organisations believe all dairy farmers must see a benefit from any increase in retail milk prices.

Farmers put tireless effort and resources into producing a quality product. And it leaves a deep and lasting impact to see your hard work sitting on a
supermarket shelf for less than the price of water.

This pricing practice is not viable and we urgently need a shared solution to assist in building the long-term sustainability of Australian dairy farmers.

Ultimately, we must push for a permanent end to discounted dairy products, whether it’s $1 per litre milk or cheap cheese.

There is a groundswell of support for farmers hit hard by the drought and supermarkets have the best opportunity to scrap their discounted dairy products
right across the breadth and depth of the dairy cabinet.

The supermarkets know what farmers want. They know what they deserve. It’s now time for them to take a big step forward and do the right thing by ending
this pricing practice.

But until that time comes, I encourage the public to help dairy farmers by continuing to buy branded dairy products.

– Terry Richardson, ADF President

I was in Canberra last month and witnessed first-hand the political turmoil that rocked the federal Government and which ultimately led to a change of
Prime Minister.

Ironically, I was accompanying a group of young dairy industry professionals as part of the Developing Dairy Leaders Program, run by Marcus Oldham College
with support from Australian Dairy Farmers and Dairy Australia.

The aim of the program is to expose the next generation of dairy representatives to industry advocacy and the Australian political process.

What they received was a valuable bonus lesson: leadership is everything.

Many of these young farmers had never visited the “bush capital” and had little understanding of how Canberra operates. For them, it was eye-opening to
be caught up in the feverish atmosphere that engulfed the city during those four days.

But the leadership lesson is transferrable to the dairy industry, which we all know has struggled with its own leadership issues in recent years.

We talk a lot about unity. We talk about creating the mindset of one team, one dream. But at some point, these words lose their value if we fail
to act.

The young dairy professionals I accompanied last week were in fierce agreement that unity is the vital element to ensuring a successful dairy industry.

This sentiment was reinforced by Agriculture Minister David Littleproud, who told the group that if they want to be taken seriously and influence federal
politicians to achieve real outcomes for the dairy industry, the sector first needs to show leadership.

I have written before about the fractured state of the dairy industry. Our differences have become pronounced. Too often, we think only about the interests
of our individual regions, instead of common ground that could provide a national, tangible benefit for dairy farmers.

This makes it difficult for political decision-makers in Canberra to understand which policies are likely to have the greatest benefit for farmers. Politicians
love an industry that brings to them solutions instead of problems. But instead we have an industry too concerned with its internal issues to agree
on solutions to the many problems we face.

As we saw in Canberra, this situation can have many consequences but won’t lead to outcomes.

The question is usually posed on social media: why can’t dairy advocacy groups work together on behalf of farmers? The
simple answer is there’s no reason why we can’t.

ADF, as the national peak organisation for dairy farmers, is the group responsible for taking solutions to Canberra and asking the federal government for
its support in enacting these measures. To be effective, we need constructive input from farmers across the country who want to ensure a secure and
prosperous future for the dairy industry.

Hopefully, this means you. We need you to join your state dairy farmer organisation and join the cause. Contribute your ideas and help us maintain a sustainable
dairy industry.

– Terry Richardson, ADF President

Farmers want protection. They want to know that if they have a contract dispute with their processor, there is a mechanism in place to ensure their interests
are safeguarded. They want certainty that there will never be another milk price crisis.

The dairy code of practice which has been in place now for just over a year was the industry’s response to address the power imbalance between farmers
and processors. Before the code was introduced in July last year, farmers had little protection against practices used by some processors.

The performance of the code of practice was reviewed by the Australian Competition and Consumer Commission (ACCC) in its dairy inquiry.

Despite recommending that the industry proceed with a mandatory code, the competition watchdog acknowledged the significant effort it took to implement
the voluntary code and the positive impact of the code on current-year (2017/18) milk contracts.

But the risk for farmers remains the same and if success is to be measured solely by the strength of the code to eliminate risk, the current code needs
strengthening. Some processors are not signatories to the code and there are no penalties enforced for breaches.

How does this prevent a repeat of the milk price crisis? Farmers can take their business elsewhere if their processor isn’t a signatory to the code. But
this is a problem in regions with only one monopoly processor. It is not a viable solution and the risk is that suppliers could once again be forced
into hardship should the milk price crash.

The ACCC report noted that the current code does not include a mechanism to resolve disputes between farmers and processors – a key difference with the
voluntary Food and Grocery Code of Conduct, which introduced an independent adjudicator to resolve complaints.

If a revised code is to provide adequate protection for farmers, it must have binding sanctions for non-compliance and independent management oversight
– including reporting and review – of code conditions.

The ACCC report generated considerable discussion around the benefits of a mandatory code. They argued that a mandatory code would eliminate this risk
for farmers, providing them with greater protection and paving the way for increased farm investment and processor competition.

But there are still many unknowns that must be investigated before the industry can proceed with a new version of the code.

The dairy industry will wear the burden of paying for administering a mandatory code. Despite media commentary suggesting the cost would be negligible,
it is a requirement of the federal Government’s Cost Recovery Guidelines that those affected by the code must pay for its administration.

Part of the code of practice review process is that we assess the potential benefits of a mandatory code to farmers against the expected costs to farmers.

If the decision is made to proceed with a mandatory code, the impact must be fully understood. It will be extremely difficult to reverse the decision if
a mandatory code doesn’t operate as farmers expect it should.

We understand the desire for quick action, but farmers should expect their national representative body to conduct this review in a considered and comprehensive
manner.

At the end of the process, regardless of the outcome, this will be a significant step with long-term ramifications for the industry, so we must get it
right.

It is vital that farmers have the best information available to them and it is our job to provide that guidance and clarity as we are committed to working
on improved contractual arrangements for farmers and rebuilding confidence in the industry.

It’s not news to say that the Australian dairy industry is highly fractured. Divisions exist all along the supply chain, often for historical reasons.

We should acknowledge the impact of the challenges of the last few years – the bargaining imbalance between different sections of the industry, volatile
markets reflected in farmgate milk prices, adverse seasonal conditions, and other factors outside farmers’ control.

While there has been hardship for many, this environment has facilitated a culture of blame and negativity, which now permeates the industry and could
have destructive consequences.

It is doing none of us any favours to attack our own. Our focus must be on working together to rebuild our industry.

Every step along the value chain depends on strong relationships, based on trust and confidence, the value of which we only know when it’s lost.

Much has been made of the trust deficit engulfing our industry. It has been broadly acknowledged that trust has been lost right across the supply chain.
But we cannot let anger describe us. We simply cannot allow the industry to implode.

Tough questions bring forward new options. Cynicism leaves us closed to new ideas. There is always be room for differences to be expressed. But this
process must be constructive.

It is vital that we find a way to cooperate, share knowledge and support each other – bring together our considerable capacity for optimism and resources
to face the future. Only through sharing our experiences can we truly understand and regain trust in our industry.

Unfortunately, this is common advice which is rarely followed. It is sad to note that the Australian dairy industry traditionally has failed to stick
together during difficult times, when unity is most important. We cannot let this vicious cycle of negativity continue.

We have a lot to be proud of as an industry. Our achievements are significant, but imagine how effective we could be as a cohesive, united industry?
That’s how we have an impact. That’s how we influence decision makers.

We need to show our unity of purpose, shared belief and passion for the dairy industry. None of us by ourselves has an answer to what may be sought,
but unity brings an open, honest, and shared discussion about the challenges faced by our friends, neighbours, or the broader industry.

If we cannot deal with challenges as an industry, there is a real problem. We need unity, collaboration and support if we are to affect change. If
we don’t have farmers sitting at the table, we lose the opportunity to help ourselves and influence the future for others

How can we expect government to help us if we can’t first help ourselves? Government doesn’t want us to dump our problems on them. They want us to
seriously consider solutions that they can implement to benefit industry.

It’s time to stop being part of the problem and start contributing to the solution. Share your pride in the work we do and value the need to contribute
to industry development. Acknowledge the belief others have shown in us through investment and a shared desire for a sustainable industry.

Join a local branch of your state dairy farming organisation, bring forward your ideas and help rebuild a strong and vibrant dairy industry.

Engage with industry leaders at all levels. They need to hear from you. Reach out with respect and ensure they have an opportunity to walk with you
and share your issues.

Be tough on issues but also respectful to our friends and others who are taking action on your behalf.

Our industry depends on our ability to unite.

Farmers are admired for the way they reach out and help neighbours and friends in time of need. However, they are also renowned for keeping their problems
to themselves.

Despite farming being a good industry to be in, we are all familiar with the challenges of farm life.It can be tough at times. Financial pressure. Overwork.
Isolation. And it is a tragic reality that this takes both a physical and mental toll on the health of individual farmers.

 A report by the National Centre for Farmer Health found that rural populations have an elevated risk of suicide, with a 66 per cent higher
risk of death than those in metropolitan areas.

Stress and depression can have tragic consequences and while there is no difference in the prevalence of mental illness between city and regions, those
in the country remain at a distinct disadvantage to our city cousins.

It is harder to find help in regional, rural or remote areas. Poor access to services and professionals, cost, and continued reluctance to seek help all
contribute to more pronounced mental illness consequences in rural communities, including a suicide rate almost double what it is in the cities, according
to the Australian Institute of Health and Welfare.

A report by mental health charity Sane Australia also found that access to medical assistance in the bush is compromised, owing to around 50 per cent less
money being spent on mental health services in rural and remote Australia.

Add to this travel times required to reach medical services and the stigma around mental illness still felt in many smaller communities and the issue becomes
a real problem.

It is a problem that extends beyond the Australian outback. We can look to the United States to see that our farmers are not alone in battling depression
and other mental health issues.

The US Centers for Disease Control and Prevention compiled a breakdown of suicide rates by profession, and farmers have the highest rates of suicide by
more than 30 percent. This study found almost identical factors contributing to depression amongst primary producers, including social isolation, financial
strain, and barriers to seeking mental health services.

The statistics are clear considering the Australian dairy industry is in a period of recovery after two challenging seasons and cash flow for many farmers
remains under pressure, while the global dairy industry continues to suffer a downturn. There are reports from the States that dairy farms are disappearing
due to the downturn and many farmers, while incredibly resilient, are now at poverty level.

We tend to acknowledge the strengths and the virtues of the dairy industry, such as improved prospects in a global market, but we must also pay attention
to the many farmers continue to suffer significant financial pressure.

We understand some farmers are suffering emotionally and physically because they simply do not have the resources to get by. We are aware of families suffering
because the farm must come first, and the farm is struggling.

There are of course understandable sensitives around pride and privacy and the silence can be deafening.

This could be because key individuals and organisations do not realise this situation exists, or because farmers are trying to project a positive but unrealistic
image of our industry.

There is little point in talking about where we will be in two years’ time if we can’t get through the present.

Some of the consequences of this silence include farmers feeling isolated or not realising they could seek help, farming families suffering short and long-term
damage as they try to cope, pressure on paying bills, impact on children’s education and farmers departing the industry.

This is a conversation we need to have. And we need to take care that we are not blaming farmers for poor business skills, or some other perceived ‘lack’.

We must find ways to talk about it, so we can create positive opportunities for farmers to help themselves and for others to help them. We must aim to
take away the stigma associated with financial stress. We’re all in this together.

If you or someone you know is struggling with mental health issues, call:

• Lifeline on 13 11 14

• Kids Helpline on 1800 551 800

• MensLine Australia on 1300 789 978

• Suicide Call Back Service on 1300 659 467

The Murray Darling Basin Plan has been subjected to countless reviews and inquiries since its inception, but the message from irrigators remains clear
– we cannot abandon the plan.

A recent inquiry by the Murray Darling Basin Authority recommended slashing the water recovery target by 70 gigalitres (GL) – 18 per cent – to lessen the
impact on irrigation communities.

Such a move has been supported by farmers, but it has been bitterly opposed by environmental groups and the Greens, who claim the Basin Plan is failing
to deliver for the environment.

The Greens have already succeeded in having the proposed changes to the federal Water Act disallowed by the Senate, but the issue is expected
to return to the upper house on May 7 and could threaten the entire Plan.

This will surely inflame tensions with Victoria and NSW. The two states have already flagged a willingness to pull the plug on the Basin Plan if the disallowance
motion gets through, leaving the whole show on the brink of collapse.

An emotional response would only be a disaster for irrigation communities along the east coast. We need our political leaders to come back to the table
in good faith with a vision to act on behalf of the whole community.

The Basin Plan is flexible — water should be able to come from a range of projects and alternative arrangements agreed by the States. It does not have
to be recovered solely from irrigators through on-farm projects. The key is that the ‘upwater’ is found without negative social or economic impacts
to communities along the river.

Australian Dairy Farmers has strongly advocated for the recovery of 605GL in offsets and would like to see the Basin states deliver the full 605GL to be
sure no further water is recovered from irrigators.

ADF and the Australian Dairy Industry Council have remained firm in advocating to halt Federal Government water buybacks at 1500 GL and urging the Government
to make clear that it will not seek to recover the additional 450GL if it would harm our farming communities.

The Government is restricted by the Water Act from purchasing more than 1500 GL. It has so far purchased around 1160 GL and can still purchase
340GL. But the 450GL of upwater is exempt from the restriction, meaning that about 790GL can still be bought by the Government.

Alternatively, the upwater can include entitlements given up by farmers in return for Federal funding of on-farm upgrades. Either way, we are faced with
the prospect of more water being ripped from productive agricultural use.

All states agreed to the offsets as a mechanism for achieving the goals of the plan. No State should be walking away from that agreed process now. The
offsets will deliver better environmental outcomes than merely sending more water down the river and hoping for the best.

The process is now being complicated further by a South Australian Royal Commission into the Plan, which intends to invite witnesses to attend formal hearings
from all four Basin states.

It is now likely this could change with the election last month of a new government in South Australia. The Australian Government is understood to be encouraging
SA Premier Steven Marshall to wind back the Royal Commission’s terms of reference.

This is only the latest in a series of reviews and inquiries that have for more than five years plagued the Basin Plan. Running concurrently with the Royal
Commission is a federally funded review which will, again, look at the effectiveness of the Plan.

We’re relying on all parties to reaffirm their commitment to the Basin Plan and reassure us that in retaining control of water, they are operating in good
faith. It’s time to quit the review process and continue with the agreed course.

The Plan will never be able to satisfy all parties equally. But it is vital we stick to the original goal and ensure the 2750GL target is delivered as
agreed, in part through 605GL in environmental offsets.

It isn’t easy being a dairy farmer. A lot of people think we just milk cows all day, but the reality is farmers need a wide range of skills to manage a
sustainable farm business.

In fact, the National Centre for Dairy Education estimated that dairy farmers need over 170 different skills to run a successful farm business.

Apart from milking, farmers have to feed livestock, make hay and silage, operate machinery, protect waterways, manage milk quality assurance and supervise
staff.

It really is a skilled profession, and one that rarely gets the credit it deserves. This is underscored by the crippling skills shortage that the industry
continues to face.

To this end, we rely on our political representatives to address the problem. Unfortunately, there is still a misapprehension from some in Canberra
that farming is an unskilled industry which should be able to source labour from the pool of unemployed in regional areas.

Reality again is different. The local labour just doesn’t exist, and many dairy employers rely on skilled migrants brought to Australia under subclass
457 visas to fill core on-farm roles. Many farmers even consider overseas workers to be integral to their long-term business strategy.

The dairy industry has found the 457 visa very useful. It has enabled us to recruit skilled workers from overseas for farm management roles. And it
has also given these workers a pathway to permanent residency. Everybody wins.

We were struck a blow when the 457 visa was abolished and replaced from March this year by the Temporary Skill Shortage visa, a scheme that operates
in two streams – for short-term labour for up to two years with the option of a two-year renewal, and for medium-term labour for up to four years.
Only the second stream offers the possibility of permanent residency.

Industries eligible under each stream is determined by the Regional Occupations List. Dairy farming is currently listed as a short-term skill, which
will only hamper our ability to use the scheme because the prospect of permanent residency is an important factor in attracting skilled overseas
workers.

It should be clear to even casual onlookers that agricultural industries are not just facing a “temporary” skills shortage. This is a problem we have
been battling for years and one that will only grow worse unless it is addressed now.

It is strange that dairy farming has remained on the Regional Occupations List yet has not been placed on the Medium Labour TSS.

One concern is that dairy farming could be wiped from the list entirely when the list is reviewed in July. We can’t let that happen and advocates in
the industry – including Australian Dairy Farmers and Dairy Australia – are working to ensure farmers’ voices remain strong on this issue.

It is vital that while the skills shortage persists, dairy farmers remain on the Regional Occupations List and that the federal Government take immediate
action to allow skilled overseas workers to gain longer visas and a pathway to permanent residency.

Given the size of the dairy industry it will take considerable time to correct the documented skills shortage with suitably qualified Australian workers.

In the meantime, dairy farmers will continue to struggle to staff their businesses with skilled workers and need to have reliable access to skilled
overseas workers.

Let’s not forget that farmers are not the only people who stand to benefit from allowing skilled overseas workers opportunities in Australia. A recent
report into the rural workforce found that immigrant farmers not only fill labour shortages, but they also bring with them new technological insights
gained overseas to apply to Australian farming, providing a valuable contribution to regional Australia.

As the Regional Occupations List comes under review, this insight hopefully provides our decision-makers with food for thought and an urgent lifeline
to an industry that still faces a critical shortage of skilled labour.

The ability to access new technologies is essential for dairy farmers to keep
the cost of production down.

DairyBio CRC and DataGene are two organisations that are steadily delivering solutions for the dairy industry in the fields of animal health, fertility, herd improvements and
genetics.

Australian Dairy Farmers (ADF) and the Australian Dairy Products Federation recently attended the Dairy Bio CRC Open Day in Hamilton, Victoria. More than
150 dairy and livestock farmers, and service providers from all over Australia attended the Open Day to view how research programs are changing the
way dairy farmers innovate on-farm.

Hamilton’s Agriculture Victoria research farm is the site where all the large-scale, field-based pasture activities are located for DairyBio, and it is
the best place to see how innovations will deliver game-changing increases in pasture yield, persistence and quality.

Throughout the day we were informed of the world’s largest precision-planted ryegrass filed trial, viewed drones and ground vehicles with advanced sensor
technologies, walked through glasshouse facilities with the latest forage innovations and shown drought-tolerance trials which could be a game-changer
for farmers in the future.

One of DairyBio CRC’s major achievements is the invention of a hybrid technique for ryegrass breeding. This will unlock a 20 per cent yield advantage in
hybrid ryegrass varieties and also make it easier for plant breeders to use genomic selection and add novel endophytes in new pasture varieties. The
current modeling suggests that hybrid ryegrass could deliver a benefit of $300 per hectare to Australian dairy farmers.

These viable solutions are a great example of how industry and research sectors work together to deliver some of the most positive and permanent changes
to dairy herds and dairy pastures.

ADF recognises the potential productivity benefits of these new technologies and the need to innovate to compete on the global stage. The adoption of these
technologies is going to become increasingly important to help farmers remain profitable, improve natural resource use and facilitate adaptation to
ongoing business pressures.

The Australian dairy industry has achieved considerable improvements in farm productivity through the adoption of new technology and will continue to find
new ways to be more efficient, and environmentally sustainable while still remaining profitable over the long term.

David Inall

ADF Chief Executive Officer

Nominations for three Business Director positions and an Independent Director on the
Australian Dairy Farmers’ (ADF) Board opened today.

ADF is calling on its members to nominate eligible candidates for three Business Director positions and an Independent Director position.

ADF President, Terry Richardson said that we are looking for dairy farmers who are passionate about advancing dairy farming in Australia and have a strong
industry commitment.

“The maximum term a Business Director may serve is three years without submitting for re-election and an Independent Director may serve two years without
submitting for re-election,” said Mr Richardson.

ADF currently has two Business Directors who were elected at the 2014 AGM for a three (3) year term, these Directors must retire and may nominate for re-election.

Additionally, following the retirement of a past President in February, a temporary Business Director was appointed in May 2017 to fill the casual vacancy.
As required by the constitution, the Business Director must retire and may nominate for re-election.

The Independent Director was elected in November 2015 for a two-year term and must retire, however may seek to be re-appointed for another term.

Director elections will take place at the ADF’s next Annual General Meeting on Thursday 24 November, 2017.

The eligibility criteria for the position of Business Director are:

• Must be in the business of dairy farming

• Must be a member of Australian Dairy Farmers Limited; and

• Must be eligible under clause 4.2.2 of the ADF Constitution (no more than two Business Directors from any one state)

If you wish to receive a nomination form or position description please contact the ADF Office via (03) 8621 4200 or email operations@australiandairyfarmers.com.au.

Applications close midday (AEST) Thursday 28 September 2017.

Terry Richardson

ADF President