Legislative Protections Afforded, Legislative Protections Achieved
The announcement by Fonterra Australia that it has settled its class action with over 350 dairy farmers closes a period of uncertainty and distress for many impacted.
The payment by Fonterra of $25M, without admission of liability, to be paid to those impacted by their actions in 2016, will provide small comfort to those who lost far more at that time, including the loss of trust in Fonterra as their processor.
Yet positives did arise from the ashes of the claw back of the farmer's milk price by Fonterra and the then Murray Goulburn.
The Mandatory Dairy Code of Conduct was introduced as a result of the lobbying of dairy industry bodies.
It has proved to be vital in helping to restore trust, openness and transparency between dairy farmers and their processors.
The Code will be celebrating its 3rd anniversary in January 2023, and it has grown organically over the past years, with oversight by the ACCC.
Since its commencement, it has continued to provide a strong platform for dialogue to achieve oversight of the milk supply agreements that were provided by processors to their suppliers.
The Code required that milk supply agreements had to be negotiated in good faith, be drafted in plain English and prohibited retrospective clawbacks as evidenced in 2016 amongst other safeguards.
Many farms are family owned and are small businesses. They are therefore afforded legislative protections against those who may be considered more powerful in their dealings.
The federal government has recently enacted unfair contracts protections for small businesses, which passed federal parliament on 27 October. The legislation is intended to ensure more competition and better prices.
By their very nature, many family-owned farms are small businesses.
The definition of a small business has been extended to be businesses with less than 100 people (from 20 people) or less than $10M turnover in the last income year.
Penalties have also been substantially increased for unfair contract terms that are found by the courts to be included in standard form contracts.
The Act provides businesses 12 months to review and amend their standard form contracts to comply with the legislation otherwise higher penalties can be imposed by the court.
Under the Competition and Consumer Act, penalties for businesses may be, whichever is the greater:
• up to a maximum of $50M; or
• three times the value of the "reasonably attributable" benefit obtained from the conduct, if the court can determine such a figure, otherwise if the benefit cannot be determined, 30% of adjusted turnover during the breach period.
For an individual, the maximum penalty will increase from $500,000 to $2.5M.
These changes have been supported by agricultural bodies such as the NFF and the ACCC.
As like the Mandatory Dairy Code, these changes will need to be monitored and amended as required to ensure that they provide the best available protection to small businesses.
President of NFF Fiona Simson has correctly identified that further work will be "needed to be done to ensure competitive markets in our food supply chains."
"The unfair contract terms laws are vital to protect consumers and small businesses against terms in these contracts that take advantage of this imbalance in bargaining power. We are pleased that these laws have been strengthened," ACCC Chair Gina Cass-Gottlieb said.
Where market power is abused by those in stronger bargaining positions, advocacy bodies like eastAUSmilk will highlight these abuses to government to seek appropriate redress.
We will watch closely as these changes come into effect and eastAUSmilk will lobby for further changes, if needed, to ensure dairy farms remain sustainable within the dairy value-chain in their relationship with processors and supermarkets.
Shaughn Morgan, Co-CEO eastAUSmilk
eastAUSmilk - time for member’s involvement
The first anniversary of the amalgamation of Queensland Dairyfarmers Organisation and Dairy Connect in forming 'eastAUSmilk' occurs on 1 December.
It has been an exciting 12 months under the guidance of Matt Trace and the members of the interim board and interim district councils.
The values that underpinns the organisation, as highlighted by the 'AUS' in the name, being 'Advocacy, Unity and Service', have provided a positive and collaborative way in bringing together dairy farmers from two states under one umbrella.
As has been said, unity of numbers and unity of purpose provides the foundations of a strong and united organisation enabling it to effectively advocate before government and other stakeholders within the dairy value chain.
With the terms of the current members of the interim board and district councils coming to an end on 31 December, eligible members of eastAUSmilk are encouraged to consider standing for their district council and/or for the board.
Nominations are now being received until Sunday 13 November and you may obtain a nomination form for your district council and/or for the board from Lynelle Rogers by emailing her on ea@eastausmilk.org.au or by phone (07) 3236 2955. Alternatively, you may download the nomination form(s) from the eastAUSmilk website at https://www.eastausmilk.org.au/board-and-district-councillor-nomination-forms
If more nominations are received than positions available in either the district councils or the board, then elections will be held to determine those who will be elected.
The board of the eastAUSmilk recently amended the boundaries of the 6 District Councils to ensure inclusivity of the members within the two States, which are now:
• the Northern – Central Qld District;
• the Burnett - Gympie - Moreton Qld District;
• the Scenic Rim – Lockyer Valley Qld District;
• the Darling Downs Qld District;
• the Northern NSW District (North Coast - Mid North Coast – Lismore - North Inland); and
• the Southern NSW District (South Coast - Sydney basin - Inland).
Involvement of the members in the democratic process of any industry association is vital for its well-being and corporate governance. I encourage you to consider becoming involved within your organisation.
If you have any questions, please feel free to contact your representative interim board member whose contact details may be found at the eastAUSmilk website or by contacting the office.
Shaughn Morgan, Co-CEO eastAUSmilk
Methane emissions - part of a bigger whole
The Australian dairy industry comprises a dairy herd of over 1.4 million cows, a workforce of over 43,000 and farm gate production valued at $4.8 billion.
In its 2021 report 'economic and broader contribution of the Australian dairy processing industry', Deloittes also estimated that dairy processors generate $15.7 billion in sales and support 70,000 full-time equivalent jobs.
The contribution of Australian dairy to the economic well-being of the nation is unquestioned.
The recent announcement by the New Zealand government to impose a 'fart tax' on livestock from 2025 may result in NZ beef and sheep production falling by 15% to 20%, with dairy declining by 5%.
NZ farmers have reacted by marching in the streets against this decision by their government.
Australian farmers were justly concerned.
Federal Minister for Agriculture Murray Watt consulted with peak agricultural bodies regarding Australia becoming a signatory to the global methane pledge to seek the aspirational collective non-binding goal, with 122 other countries, of reducing methane emissions by 30% by 2030.
Minister Watt stated that "the pledge does not require reduced herd sizes and (the government) will not legislate taxes or levies to reduce livestock emissions".
Peak bodies welcomed the Minister's pledge.
CEO of the Cattle Council, John McGoverine, stated that "millions in cattle levies have been invested in new feed additives that significantly reduce methane emissions including asparagopsis, or pink seaweed, which can cut emissions by more than 90%".
Australian dairy has also committed to reducing methane emissions.
Dairy Australia supports a 5 pronged approach on emission levels, including boosting diet quality; genetic improvement within cows; availability of better feeding for cows; improving a farmer's herd fertility and perfecting pastures.
Australian dairy farms are declining already. Any 'fart tax' would substantially increase the decline and any tax would be opposed by agricultural industry bodies.
Farmers need to be provided with incentives to reduce methane emissions not penalties as in New Zealand.
Rather government must improve resourcing for RD&E to find better ways to reduce emissions across all industry sectors, not just agriculture.
While the government's pledge is only an aspirational goal, it needs to be remembered that Australian food security and our economy depends on a strong agricultural sector. This should not be forgotten in future discussions.
Shaughn Morgan Co-CEO eastAUSmilk
Milk comes from dairy cows not plants
Dairy farmers and their families are grateful for the ongoing strong support of Australian consumers for fresh nutritious milk, which is a staple of their food basket.
This is demonstrated by the continuing demand for fresh milk by supermarket customers.
Dairy Australia's Human Health and Nutrition Policy Manager, Melissa Cameron, in her recent presentation to the eastAUSmilk Annual Forum, indicated that 98% of households continue to regularly purchase milk.
She went on to say that 82% of households also agree that it's important to support the Aussie dairy industry.
Indeed, dairy milk provides 9 nutrients essential to human health.
Milk also contains other nutrients including B vitamins for energy, vitamin A to help maintain a healthy immune system and calcium and vitamin D, both of which work to build bone strength.
It is for these reasons that our peak advocacy body Australian Dairy Farmers (supported by the State Dairy Organisations and based on the empirical data and evidence provided by Dairy Australia) advocates for the importance of 'truth in labelling' in dairy produce.
Iconic dairy terms such as ‘milk’ should be safeguarded from misuse. This is especially so with the increasing acceptance of plant-based drinks as a 'milk substitute'.
Non-dairy alternatives generally had filtered water added to their plant base and were fortified with calcium and a range of other minerals and vitamins.
In some cases, key minerals and vitamins were not naturally present in these plant-sourced drinks. Nutrients were added to these products to try to mimic the composition of dairy milk.
Hence, the nutritional differences between dairy milk and plant-based alternatives are self-evident and 'truth in labelling' should occur now.
In the USA, the National Milk Producers’ Federation characterises such labelling as a misappropriation of ‘traditional dairy terms’ and says that ‘food labels should clearly and accurately identify the true nature of the food to the consumer’.
These non-dairy businesses should not be permitted to represent their products as something they are not.
Thus, the Government should act now to implement the many recommendations put forward over the past years and ensure that dairy milk is afforded the protection that the name 'milk' deserves.
Dairy farmers who work from before dawn to well after dusk each day deserve no less.
Shaughn Morgan, co-CEO eastAUSmilk
Annual Forum and Annual General Meeting 2022 - A Reflection
The Board and members of eastAUSmilk were grateful for the hospitality afforded to them by the people and dairy farmers of the Northern Rivers when the advocacy body held its recent Board Meeting, Annual Forum and Annual General Meeting in Lismore.
We were pleased to support the community as it continues its rebuilding of its township within its region, after the devastating impact of the floods.
The members were provided with 2 policy updates from experts in their fields on the preparedness to prevent foot and mouth disease and other biosecurity risks from reaching Australian shores (www.daf.engagementhub.com.au/animal-disease-preparedness) as well as the high nutritional value of dairy as against plant-based alternatives (www.dairy.com.au/health/nutrients).
Both presentations were well received, and copies of the speaker's PowerPoints may be obtained by emailing shaughn@eastausmilk.org.au
In 2 further addresses, the CEO of Norco, Michael Hampson, reflected upon the importance of collaboration within the dairy industry while CEO David Inall spoke about the activities of our peak industry body Australian Dairy Farmers.
The current Board also agreed to the timetable for the upcoming Board and District Councils to replace the interim members. Information will be made available in October for the nomination process and elections to be held so that the elected members can commence their tasks on 1 January 2023.
To stand for elected office, join eastAUSmilk and become an active member of your industry association. Further information regarding membership may be obtained from Lynelle at ea@eastausmilk.org.au
In his Presidential Address, Matt Trace, spoke about the positive messages from the FairGo Dairy Logo campaign within the dairy industry and the natural disasters that NSW and Queensland have encountered over the past 12 months.
The resilience of the agricultural sector to such adversity is to be applauded.
Expressions of thanks were also extended to former President (and current ADF Board member) Brian Tessmann as well as former Board members Joe Bradley and Gary Wenzel who all stepped down since the 2021 AGM.
The Board, District Councils and staff look forward to continuing to lobby and advance the cause of a strong, vibrant, and sustainable dairy industry in the northern States in the months and years ahead.
Shaughn Morgan, co-CEO eastAUSmilk
eastAUSmilk – accountability and growth
At the heart of every industry body is its members.
Members provide the guidance to the elected officials in undertaking their duties and policy direction for staff to advocate on the many issues that the members confront on a daily basis.
In that regard, eastAUSmilk is no different to any other organisation whose task is to safeguard the interests of their members.
Part of that democratic process is the holding each year of the Annual General Meeting where the members are provided with a 'health' check on their organisation.
They are able to ask questions of their Chairperson and seek confirmation from members of the Board. It is not just an expectation but a statutory requirement for such meetings to occur.
It is in essence the accountability that members not only want but need.
On 30 August, eastAUSmilk will be holding its AGM at the Lismore Turf Club, starting at 1pm. It will be preceded by the Annual Forum where member updates will be provided, and topical policy issues will be presented and discussed.
One of the major issues that dairy farmer members have raised with their Board members in recent times is that of biosecurity and in particular the safeguards that are in place to prevent 'foot and mouth disease' and 'lumpy skin disease' from taking hold in Australia.
We are pleased that at the Forum, representatives of QLD DAF and NSW DPI will address matters relating to biosecurity and where members can raise questions that they may have.
As well, Melissa Cameron from Dairy Australia will provide information regarding the nutritional benefits of dairy milk as against plant-based alternatives. This is topical given the continuing public discussion regarding 'truth in labelling' and its importance to dairy farmers and consumers generally.
Updates will also be provided by the CEO of dairy cooperative Norco, Michael Hampson, and the CEO of Australian Dairy Farmers, David Inall.
The Annual Forum will be from 9.30am for a 10am start and is open to members and dairy farmers generally.
Additionally, the day will also be an opportunity to mix informally with other members, dairy farmers, directors, and staff.
Through such interaction, the vitality of eastAUSmilk can be maintained and allowed to grow organically.
The Board of eastAUSmilk looks forward to welcoming you to the Annual Forum and AGM on 30 August at the Lismore Turf Club.
Shaughn Morgan, Co-CEO eastAUSmilk
A new Era for QLD and NSW Dairy Farmers
1 December 2021 was a significant day for dairy farmers in Queensland and NSW.
On that day, Queensland Dairyfarmers Organisation and NSW based Dairy Connect came together to form a single dairy farmer organisation representing Queensland and NSW under the united badge of eastAUSmilk.
These two industry advocacy bodies represented their members (and the dairy industry generally) over many years of public service.
Each organisation took leadership roles across a broad spectrum of policy issues, ranging from the introduction of the Dairy Mandatory Code of Conduct through to the demise of $1/L milk.
Yet like most Industry bodies, it was proving difficult to arrest the decline of dairy farms with the resulting decrease in milk production. This has become even more evident over the past decade and has been an ongoing trend since deregulation of the dairy industry in 2000.
By joining together, our two bodies could represent a greater number of dairy farmers before government and stakeholders, as well as providing an enhanced service to our dairy members.
Under the chairmanship of Matt Trace and ably supported by his Board, each representing one of the 6 District Councils, eastAUSmilk has proudly continued the strong traditions of its august past but always looking to the future.
The Board recently farewelled Gary Wenzel and he was thanked for his support of eastAUSmilk.
As with farming succession, the Board is pleased to welcome 6th generation Kerry Valley dairy farmer Kay Tommerup to the Board. Her family's dairy farm can proudly trace its history to 1874.
More information about Kay may be found at www.tommerupsdairyfarm.com.au
With an eye on the future of eastAUSmilk and dairying in Queensland and NSW, the 2022 AGM will be held on 30 August at the Lismore Turf Club. The Board and members are looking forward to visiting the Northern Rivers. Formal notification and further information will be sent to members shortly.
If you wish to become a member of our vibrant industry association, please visit www.eastausmilk.org.au where you can learn more about eastAUSmilk and become a part of our future direction.
Shaughn Morgan, co-CEO eastAUSmilk
The Future of Australian Dairy
In 2011, supermarkets decided to reduce the price of fresh milk to $1/L litre. This resulted in devaluing nutritious milk and undermining dairy farmers.
This changed in 2018 when the supermarkets, led by Woolworths, acknowledged that $1/L milk was having a negative effect upon dairy farmers and the farmgate price they were paid.
$1/L milk was at an end and the price was increased but after so many years it was still devalued.
Over these same years, the dairy industry has seen a continued reduction of dairy farms throughout Australia. In Queensland for instance there were over 3000 dairy farms in 1980, twenty years later it was approximately 600 dairy farms while today it is under 300 dairy farms.
In terms of milk production, this has also been impacted. Australia is currently producing approximately 8 billion litres compared to 12 billion litres a few years ago.
The farm gate prices that have been announced over the past months (while strong, open and transparent) are only keeping pace with the increase in input costs (for instance fertiliser, diesel and energy) that the dairy value chain, from farmers, processors to supermarkets, pay every day.
The pressure being placed on dairy farmers continues to be immense, both economically and emotionally.
More recently, farmers have experienced floods, droughts, bushfires and other natural disasters all in close proximity.
Now, on our doorstep is Foot and Mouth Disease. If it was to reach Australian shores, the immediate impact on livestock (including dairy) would be worse than disastrous.
Export sales would stop, movement of cattle would cease and (depending on the outbreak) cows would be culled and euthanised.
Decades of genetics lost in a matter of weeks. Monetary compensation would not offset these losses.
It is little wonder that dairy farmers are concerned every day about such an outbreak and the impact it would have upon their farm and the communities that support them.
Discussion has ranged from increased biosecurity measures at ports of arrival, availability of vaccinations (both here and overseas) as well as restricting travel to tourist destinations where FMD is rife.
Regardless of the issues that Aussie dairy farmers will face over the coming months, they will continue to remain resilient and strong in the face of such adversity.
While more will need to be done to ensure a long term sustainable Australian dairy industry, supermarket customers will still be able to buy Aussie produced fresh milk and dairy products from the supermarket dairy cabinet.
Shaughn Morgan, co-CEO eastAUSmilk
More Action Needed to Halt Risk of FMD
Australian livestock farmers and the industries and communities that underpin them are facing an economic and social crisis that will cripple their livestock farms should foot and mouth disease reach Australia.
The economic consequences would be devastating for livestock producers. It is estimated that our red meat exports would be immediately hit with losses valued at $15 billion and it would take years to return to markets that will be lost.
The impact on farmers and their families will be crippling. Farmers have been through devastating droughts, floods and bushfires over the past years and for many, the effects of a FMD outbreak would see them leave the industry in even greater numbers than in recent years.
This would result in a further reduction in fresh milk production, which is already falling throughout Australia.
Supermarket customers will see an immediate reduction in the availability of Australian dairy and meat products on the supermarket shelves and prices will be higher.
FMD in cows is a painful disease that causes blisters in their mouths and results in cows being euthanised. The UK outbreak in 2001 resulted in 6 million animals being killed. The impact on our industry will be far greater.
Overall, the financial impact of an uncontrolled outbreak in Australia would be approximately $80 billion over 10 years.
With FMD on Australia’s doorstep, over the past months the federal and state governments, in conjunction with peak agricultural bodies, have been discussing ways to enhance our biosecurity to prevent FMD from reaching our shores.
Campaigns have been undertaken to educate overseas travellers, particularly to tourist hotspots with FMD such as Bali.
However, this is not enough. Paying compensation to affected farmers would never replace the true value of their cows. They need to ensure that their farms are FMD safe.
It is not inevitable that FMD will arrive in Australia. Those who express this view are wrong and it must not be accepted.
Instead, much more must be done to prevent FMD from reaching our shores.
The Government must immediately reconsider imposing travel restrictions to areas that are close to Australia and which are FMD infected. This may only be needed for a short period of time but it will enable those nations to vaccinate their cows and thus control the outbreaks.
The announcement by the Federal Government to introduce 'sanitation foot mats' for incoming travellers from infected countries at all airports is welcomed but other shoes being carried by passengers must be inspected and disinfected as necessary. This is a further extension but is an inexpensive and effective solution.
We introduced harsh restrictions to halt COVID over the past years, we must do likewise to stop FMD and to protect our livestock industries. The risk is too great – more needs to be done now.
We will regret it if we do not do so.
Shaughn Morgan, co-CEO eastAUSmilk
Federal Labor Government – a new beginning or continuing decline?
With a newly installed Federal Government comes newly appointed Ministers who will be briefed by their policy advisors. The public service and departmental heads will provide briefings as to how their policies can be implemented. With it, industry bodies will seek meetings to put their member's views forward and ensure their positions are given appropriate consideration.
During the election, agricultural policy was announced in the broad brush but as always, the 'devil is in the detail'.
Labor have announced changes to the agricultural visa scheme. They intend a renewed focus towards to the Pacific to increase farm labour.
Promises have been made to increase biosecurity funding to help prevent Lumpy Skin & Foot and Mouth diseases breaching our borders, with the continuing outbreaks in Indonesia. Diseases which threaten livestock industries.
These holistic issues are of most immediate concern to farmers, especially within dairy and we welcome these commitments.
However, other immediate matters also need to be considered and addressed.
Dairy Australia's latest situation and outlook report highlights the increasing input costs that dairy farmers are facing. Fertiliser, fodder, fuel and grain prices doubled in price over the past 12 months, placing undue pressure on dairy farmers to continue to survive within the dairy industry. Dairy farmers on the Atherton Tablelands, for instance, are facing some of the highest fodder costs with an average of $350 a tonne for pasture hay.
These harsh imposts are contributing to the decline in the number of dairy farmers across the dairy States, especially where the farm-gate price being received is not equal to their costs of production. Hence the real need for supermarkets to increase the price of home-brand milk to a minimum of $2/L. In turn, processors must guarantee to pass these gains back to the farmers in their milk price.
The Labor election commitment to convene a dairy symposium is a positive and proactive step.
It will enable the dairy industry to consider ways in which to stop the decline of dairy farms and provide solutions to ensure a future for generation of dairy farmers to come.
The symposium will enable dairy representatives, from dairy farmers to supermarkets, to address a vast and complex number of issues which were identified in numerous recent parliamentary and ACCC reports. These include the dairy mandatory code, input costs, 'truth in labelling', market failure to name but a few of the issues.
The symposium may not be the panacea, but it will help crystallise the ongoing issues and the way in which we need to find a collaborative solution. Otherwise, the dairy industry we know today, which itself requires strong positive change, will be very different to the industry that will or will not exist in the future.
Shaughn Morgan – eastAUSmilk Co-CEO