Australian Dairy Farmers put end to processor funding to avoid conflict

Australian Dairy Farmers will no longer take millions of dollars in funding from processors, to end concerns it was conflicted on key industry reforms.

FOCUS STORY: Toby and son Nick Leppin are dairy farmers from Bena in South Gippsland. Aussie Red Dairy Cows.

AUSTRALIA’S peak dairy farmer lobby will no longer take $1 million a year in processor funding, putting an end to concerns it was conflicted on key industry reforms.

Australian Dairy Farmers president Terry Richardson has told his fellow farmers the funding arrangement with the nation’s dairy processing giants came to an end on July 1.

United Dairyfarmers of Victoria president Paul Mumford welcomed the move.

“The national body has always been under scrutiny for aligning themselves with processors,” he said.

“Farmers wanted to see a clear delineation between ADF and processors.”

Concern over ADF’s reliance on processor funding reached a crisis point in mid-2018 after it refused to back a mandatory code of conduct to improve contracting practices between farmers and processors.

The ADF’s opposition came despite widespread support for a mandatory code, overseen by the Australian Competition and Consumer Commission.

At the time leading industry sources told The Weekly Times dairy processors had threatened to withdraw their annual $1 million contribution to the ADF if it supported the mandatory code.

But by November the ADF board voted seven to six in favour of the mandatory code.

An ADF spokesman said the agreement was never intended to be a permanent arrangement and “ADF did not seek to renew the agreement”.

But the ADF’s financial records show it has been reliant on processor funding ranging from $780,400 to $1.1m a year for the past four years.

The loss of funding means ADF must cut back and seek other funding, some of which has come from government.

“ADF has been aware for some time that the ADIC Investment Plan (processor funding) was due to end we have been actively reducing our expenditure — including rationalising the structure and economising where possible,” the ADF spokesman said.

ADF president Terry Richardson and chief executive David Inall have met new Agriculture Minister Bridget McKenzie to reaffirm the Coalition’s election promise to provide funding ADF with:

$300,000 to develop a real-time dairy payment system and supply chain information sharing capacity using blockchain technology; and

$150,000 to develop with processors a simple standard form contract that incorporates requirements of the industry’s mandatory code of conduct.