DAIRY NEWS AUSTRALIA OCTOBER 2020
4 // NEWS
No punches pulled at inquiry DANEKA HILL
DAIRY POLITICS flared up in a big way at the
latest Senate hearing into the performance of the dairy industry. The hearing was held e ntirely via telecommunication and heard from 52 Victorian farmers and industry workers. Overwhelmingly farmers expressed disappointment in their advocacy bodies, a mistrust in Dairy Australia, Australian Dairy Farmers and the Australian Dairy Plan, and a desire for change. “We believe this Senate inquiry has the opportunity to delve deeply into the dairy industry structure and uncover its shortcomings, its failures, and its conflicts of interest,” Farmer Power chief executive Garry Kerr said. Farmer Power is a grassroots advocacy group voluntarily led by farmers. Farmer Power believes established advocacy bodies have too many conflictions of interest and allow dairy processors too much influence over decisions. “It is clear to most that the processors cannot be on an advocacy representing dairy farmers, yet this is just one of the things currently being proposed under the new Australian Dairy Plan,” Mr Kerr said. The new dairy plan — known as NewCo B — had few friends among the 52 who spoke before the inquiry. One rare friend was United Dairyfarmers of Victoria president Paul Mumford. Mr Mumford believed involving processors more was a good thing, and proposed they contribute to the dairy levy which all dairy
farmers must pay to the Dairy Australia to support its existence as the industry’s leader. “If we are trying to create a unified industry, the processors should add value in some form. Currently, they have the use of some of the services of DA,” Mr Mumford said, arguing since processors benefited from DA activities, they should also pay up. Mr Mumford and UDV manager Ashlee Hamond said their organisation did not support a minimum farm gate milk price because it would hurt milk exports, shrink the Victorian milk pool and there was no way to make the price fair. “We are all different in how we produce milk,” Mr Mumford said, himself a south Gippsland farmer of 430 milking Jersey cows “We can’t standardise two dairy farms sideby-side, because of all the nuances within their own business.” UDV members have voiced concerns about the UDV’s views on the Australian Dairy Plan, leading to weeks of membership consultation across the state. Three DFV founders gave information at the hearing — Winslow farmer Bernie Free was one of them. He shunned the UDV for their “quiet voice throughout” the two-day dairy plan workshop. Mr Free said all state advocacy bodies - except for the Queensland Dairyfarmers Organisation had been “deafening in their silence”. Fellow DFV founder Bruce Knowles, a Tyrendarra farmer, said of the industry’s current problems: “it’s political”. “The unaccountable governance and structures within the Australian dairy industry are letting dairy farmers and their communities down,” Mr Knowles said.
Mistrust in processor involvement and anger towards the advocacy groups which have steered the dairy industry over the past two decades was a recurring theme at the senate hearing.
“[The ADP] is a facade and the grassroots levypaying dairy farmers are just being strung along.” Two new dairy plans have been developed to rival the ADP’s NewCo B — the Wannon solution (created by the DFV) and the John Dahlsen farmer representative model (created by solicitor John Dahlsen). United Workers Union food and beverage director Susan Allison spoke on behalf of processor workers at the inquiry hearing. She said workers supported a minimum farm gate milk price, and the union had made this clear to the ADP only to get radio silence. “I’m deeply concerned that the views of workers and the grassroots voices of farmers, who are key to the industry, are being ignored,” Ms Allison said. Branxholme farmer Allan Campbell supported the Wannon solution, which his
farm-consultant daughter Sarah Campbell helped develop. “Some whe re through this process, the concerns of grassroots dairy farmer representation and advocacy has been derailed and represented in a form to propose a dairy industry model involving processors and Dairy Australia,” Mr Campbell said. He said last financial year he paid $4700 in membership fees to the UDV, and all he got for it was a “spineless response” when the UDV supported the “processor and DA-controlled” NewCo B plan. The inquiry into the performance of Australia’s dairy industry and the profitability of Australian dairy farmers since deregulation in 2000 has been hearing evidence since December 2019, and is expected to hand down a report in February 2021.
FONTERRA MILK COLLECTION FALLS Fonterra Australia has recorded a drop of 12 per cent in milk collection, according to the 2019-20 financial results of its New Zealand counterpart. The drop in milk collection to 107.8 million kg of milk solids was caused by a combination of drought, high on-farm input costs and a highly competitive milk supply market.
Sales volumes for Australian Ingredients, the ingredients channel within Fonterra Australia, also declined by 18 per cent, due to the drop in milk collection. It wasn’t all bad news, with the ingredients channel’s gross profit increasing from $10 million to $31 million due to reduced costs as a result of closing the Dennington site, better utilisation of the
Stanhope site and allocating more milk to higher returning cheddar and mozzarella products rather than the lower returning liquid and whole milk powder products. The Stanhope site was also leading the way in the company’s attempts to reduce water use by 30 per cent. “This year we reduced water use at our sites, in water constrained regions,
by 6.4 per cent, which is a 3.1 per cent reduction against our 2018 baseline and a significant step towards our 30 per cent reduction target by 2030,” the report said. “Our Stanhope site delivered most of the improvement, installing new treatment infrastructure which has significantly reduced the water it uses.”
