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Important Outcomes From The Symposium

The symposium was held yesterday in Melbourne and both the Australian Dairy
Farmers CEO John McQueen and myself attended.

Firstly, I would like to thank the Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce for organising and chairing the
symposium as well as other government officials who were in attendance.

I would also like to thank our state members – QDO, NSWFarmers, SADA, TFGA, UDV, WAFarmers and industry partners for their work prior to the symposium
which gave us the opportunity to narrow our message down to focus on four important key areas.

Lastly I would like to thank the processors and retailers who were at the symposium to hear from concerned farmers, owners of small businesses and people
who produce a quality product that many people in Australia rely on.

For me, the symposium provided an opportunity for the dairy industry to have an open discussion with key stakeholders to address the challenges facing
the Australian dairy industry.

Our main points include no $1 milk, no late season drop in milk price, fairer contracts, commodity milk price index with an educational program and critical
need for farmers and manufacturers to find the solutions rather than depend on government.

These points illustrate the need by industry to ease the pressure placed on farmers by having to accept an unfair share of the risk and possible financial
fall-out. We believe in greater transparency and look forward to working with the government on establishing the commodity price index tool which will
help tip the balance back to the farmer.

Since 2011, we have said that the $1 milk devalues the product by taking substantial value out of the supply chain and has to stop if we are going to maintain
a sustainable industry. There needs to be greater fairness in contracts and we have committed to working with processors to ensure all contracts comply
with the unfair Contracts Legislation that begins on November 12, 2016. Also, the situation in Western Australia needs to be addressed immediately
as we don’t believe it’s right that nine farmers may not have anywhere to take their milk.

In response, Minister Joyce urges the need for industry to work together to better balance risk along the dairy supply chain, especially when it comes
to managing the effects of lower world prices. He wants to see improved Farmgate returns for dairy farmers, an openness in milk price arrangements
and fair and transparent milk supply contracts; plus, the development of a commodity milk price index which he committed up to $2 million in government
funding to establish. Also, for industry to find a compromise to the $1 milk situation otherwise he will need to take action and push for an immediate
solution.

However, he also acknowledged that these things will only happen if there is buy-in from industry and a willingness from key stakeholders to hear each
other out and develop solutions together.

A surprise announcement made by Minister Joyce at the conclusion of the symposium advised that Treasurer Scott Morrison has request the ACCC to undertake
an inquiry under Part VIIA of the Competition and Consumer Act 2010 providing the Commission with powers to obtain information from the entire value
chain. What this means is the ACCC has been given extra investigatory powers to undertake the inquiry, with the authority to dig deeper than it would
have been able to in a market study. The inquiry, which will begin in November, will investigate sharing risk along the supply chain, supply agreements
and contracts, competition, bargaining and trading practices in the industry and the effect of world retail prices on profitability.

Yesterday’s dairy symposium delivered on Minister Joyce’s election promise to get key stakeholders together to address challenges facing the Australian
dairy industry and discuss ways to improve the industry’s prospects going forward.

One of the ways the Coalition Government is delivering assistance to dairy farmers is with a $579 million support package to help manage through the current
low price environment. The funding been allocated to four main areas including access to Dairy Recovery Concessional Loans, Farm Household Allowance
(FHA), the Rural Financial Counselling Service and an additional $900,000 for Dairy Australia to roll out ‘Tactics for Tight Times’ one-to-one farm
business advice.

If you have any questions relating to whether you are eligible for the concessional loans, the government has released a dairy question and answer section
on their website (click here).
However, we suggest that you also contact a financial counsellor or the relevant state delivery agency as they will be able to help you with information
and the application process.

David Basham

Acting ADF President

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