Submission against new dairy levy poll

01 Feb, 2017 05:57 PM

NO poll of dairy farmers is needed this year to determine how much Dairy Produce Levy they should pay, an inaugural industry advisory committee has decided.

The 15-member Dairy Levy Poll Advisory Committee (LPAC) accepted a joint submission from Australian Dairy Farmers (ADF) and Dairy Australia that the levy should remain unchanged and last week unanimously decided not to request a levy poll.

Under previous legislation a levy poll would have been required to be held this year.

The last one was in 2012 and cost Dairy Australia $750,000.

But early last year, after a vote by dairy farmers, the Dairy Produce Act was amended to remove compulsion on Dairy Australia to hold a levy poll at least every five years.

Agriculture and Water Resources Minister Barnaby Joyce had earlier signed off on a new process requiring an LPAC to be convened every five years to determine whether or not a poll was required.

The levy, based on fat and protein content of fresh milk, is deducted from farmer milk payments by dairy processors and paid monthly to the Agriculture and Water Resources Department.

Government funding of Dairy Australia and its research, development and extension (RD&E) programs is partly determined by the amount of money raised by the levy.

LPAC chairman John Lawrenson said the committee had been very mindful of the state of the industry and impact farmgate prices were having on farm profitability.

"In considering the level of the levy, the committee was cognisant of the need to ensure that an appropriate level of funding is available to Dairy Australia to support the current and future long-term research, development and extension strategy for the dairy industry which is critical to improving farm productivity," said Mr Lawrenson, a former Bonlac Foods director.

"The committee was (also) conscious of the impact that falling farmgate prices and milk production will have on Dairy Australia's future income - both the levy and the matching federal government funding.

"(It) noted the positive returns to industry from DA projects, the significant increase in investment in extension to compensate for the reduction in State government activity and the increased investment in pre-farmgate RD&E," he said.

Over a series of meetings the LPAC considered Dairy Australia's three-year strategic plan to 2018-19 and anticipated benefits from projected RD&E investment in that period, Mr Lawrenson said.

It also reviewed Dairy Australia's services to levy payers, particularly programs relating to profitability-productivity, skills development and those, he said, which aimed at "protecting the industry's long-term licence to operate".

Mr Lawrenson said evidence Dairy Australia's investment created spin-off benefits for rural Australia and the effectiveness of the levy in leveraging more than $20 million in funding from governments (State and Federal) and other sources, was taken into account.

He said the LPAC also reviewed benefit cost analyses from recent investments.

The new process allows Dairy Australia levy payer Group A members - dairy farmers (industry organisations are Group B members) - who disagree with the LPAC's decision, to lodge a petition asking for a poll with Dairy Australia within 75 days.

To be successful, the petition requires Group A member signatures of farmers whose levy payments comprised 15 per cent or more of levies paid the previous financial year and must include a proposed levy amount.

A proposal to hold a levy poll would then be put to a vote of Dairy Australia members and if more than half vote yes the LPAC would be reconvened to consider options to be included on the ballot paper, one of which must be the petitioners' proposal.

Members of the mainly Victorian-based Farmer Power lobby group have begun the process and hope to collect 1000 signatures on a petition calling for the Dairy Produce Levy to be reduced to zero.

According to the Agriculture and Water Resources Department website, the levy is calculated at a rate of 2.9263 cents per kilogram of milk fat plus 7.1299 cents per kilogram of protein in the volume of whole milk supplied.

When test results are not available a default rate of 3.2pc milk fat and 3pc protein per litre is used to calculate the levy amount owed.

Dairy council president Michael Partridge said WAFarmers supported the LPAC decision not to request a poll.

"Our view is we support that - there has been extensive consultation take place and there has been no request for a change to the levy, so there is no need for a poll," Mr Partridge said.

"(Not holding a poll) is also a cost saving measure, the last time it cost a considerable amount of money.

"We certainly recognise there is value for the entire industry from the levy we pay in that it leverages money from government to help pay for R&D programs across the nation," he said.

As previously reported in Farm Weekly, WA's sole voice on the LPAC was one of its most successful dairy farmers, Peter Evans, North Jindong, who was one of 11 levy payers on the committee.

Dairy Australia and its western division, Western Dairy, are more than a third of the way through a three-year RD&E agreement with the Department of Agriculture and Food WA (DAFWA).

The agreement will see DAFWA's role in funding and undertaking State-sponsored RD&E for the WA dairy industry devolved to Western Dairy and its Bunbury dairy hub.

Dairy Australia has pledged funding from the Dairy Produce Levy to the dairy hub project.

Mal Gill

Mal Gill

is wool and dairy writer for Farm Weekly


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