Proof in the product: Dairy Levy

Large risks, huge expenses and long time-lags make investment in research, development, extension (R,D&E) and marketing unfeasible for individual dairy farm businesses.

Instead, to deliver appropriate improvements pre and post-farmgate, all Australian dairy farmers pay a levy based on milk production – an investment that has seen a reported benefit of $3.30 for each $1 spent.

On 4 February, the Australian Dairy Industry Council (ADIC) – the peak, national whole-of-value-chain advocacy body – appeared at the hearing of the Inquiry into agricultural levies. This included the dairy services levy that contributes to Dairy Australia (DA) and the equivalent levies paid by farmers for other research and development corporations.

DA and the CRC also appeared at the hearing. The Senators were interested in the DA R,D&E priorities, the processes for determining those priorities, how research had impacted dairy farm productivity and the levy poll process.

The Dairy Services Levy amounts to approximately $33m per year and attracts Federal Government funding of about $20m annually, all administered by DA. Other bodies, such as the Geoffrey Gardiner Dairy Foundation, state departments of primary industries and dairy manufacturers, also support new and ongoing R,D&E.

The investments are made according to a strategic plan prepared in consultation with all key stakeholders, including Australian Dairy Farmers (ADF), and reviewed by government.

ADF and DA have a memorandum of understanding whereby ADF provides strategic direction towards the investment priorities of R,D&E projects to ensure farmers’ levies are positively advancing their interests.

ADF’s feedback to DA has commented on the investment priorities for research, gaps in the draft priorities, program delivery options, as well as monitoring and understanding the effectiveness and uptake of DA programs.

Additionally, the Australian Dairy Herd Improvement Scheme (ADHIS) is an ADF initiative majority-funded by DA.

In its November 2014 submission to the Senate Inquiry into the systems and structures for the agricultural research and development levies, ADF in collaboration with the Australian Dairy Industry Council (ADIC) noted the importance of process for farmers to know about and contribute to the DA strategy, and for DA to report on the benefit of levy investment to farmers. 

ADF also encouraged farmers to make their own submissions to the inquiry, to ensure their perspectives were heard by the Senate Inquiry on more than one platform.

For more information about the Inquiry, its terms of reference and to view the full ADIC submission please see here.

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