Voting for the future

27 Jul, 2006 07:00 PM
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DAIRY farmers need to consider the future of their industry before recommending a new rate for the Dairy Service Levy next March.

Dairy Australia managing director Mike Ginnivan said at the Dairy levy service dinner this month that producers needed to consider what level of services they felt were appropriate to carry them into the future.

"The vote is not about our performance, it is not about the projects we select, it is basically about the degree and the extent of services the dairy industry is interested in having provided for them," Dr Ginnivan said.

"Next March the dairy industry will get the opportunity to make a decision on a range of options, one of which will be zero.

"Producers will only get a chance to vote on the levy option once every five years, therefore it is a significant decision to make."

Dr Ginnivan said he was not interested in suggesting one option or the other but wanted to make sure farmers were as informed as possible in order to make an appropriate decision.

He highlighted the importance of the collective action within the dairy industry.

"Individually the average levy payer who produces slightly in excess of one million litres of milk per year, could only support an average researcher for 4.8 days on a 1pc levy," Dr Ginnivan said.

"Collectively with leverage and gearing and by operating in a collaborative way, we as an industry are responsible for investments that are far beyond the $50 million cash that dairy Australia distributes annually.

"We need to be mindful of our opportunities to work together under the banner of collective action."

Dr Ginnivan said collective action would bring focus, create leverage and drive innovation.

"We can put together significant research programs because the government believes we represent the dairy industry in conjunction with other industries and they can therefore have a point of focus for their activities," he said.

"We have a unique opportunity to work together as there are only 9200 dairy producers.

"Our size means we can operate constantly with a single or a series of goals.

"Collective action can also drive innovation, as together we can embrace risk and move forward."

Dr Ginnivan said if Dairy Australia failed it was not pushing hard enough.

"If we do take risks we will not make more than incremental changes," he said.

"For this industry at this time in these circumstances, collective action is the way to go."

The dairy industry was in a constant state of change and the levy would provide producers with an opportunity to manage some of that change.

"The rate of change is likely to increase in the future," Dr Ginnivan said.

"There needs to be more emphasis on collective action because as things change we are going to see a lot more pressure from emerging countries.

"We are also going to be challenged because we are a low-cost producer.

"Our costs of production are going to become significantly less competitive because some of the other countries are only paying $20 a month for labour and the land is much cheaper."

Dr Ginnivan said another problem facing the dairy industry was changing diets and obesity concerns.

"Dairy was once considered a staple product, but is no longer seen as an essential part of the diet," he said.

"We need to maintain our high reputation in order for consumers to appreciate dairy and get over issues involving fat and obesity."

Dr Ginnivan said dairy protein was valued at about twice the value of soy because it had unique functional and nutritional benefits.

"If soy protein was able to, by a variety of mechanisms, erode those functional and nutritional benefits the price differential we benefit from would disappear - and it is happening already," he said.

"The consequences of that getting through would have been significant."

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