Dairy farmers demand Fonterra, Saputo and others pay up or leave DA

Farmers have had enough, warning processors to pay their share of Dairy Australia’s research, development and marketing costs.

Time to deliver: United Dairyfarmers of Victoria president Paul Mumford says it’s time for processors to deliver on paying a fair share of Dairy Australia’s costs.

Farmers are mounting a campaign to oust dairy giants Fonterra, Saputo and other processors from the industry’s peak research, development and marketing body, unless they pay their fair share of Dairy Australia’s costs.

United Dairyfarmers of Victoria president Paul Mumford said the nation’s largest dairy state was backing “an ultimatum to dairy processors to stump up or piss off” – out of DA.

Currently, dairy processors contribute virtually nothing to Dairy Australia, but are granted a seat on its board and its selection committee, are listed as Group B shareholders and were even represented on the advisory committee that recommended lifting farmers’ DA levy contributions by 20 per cent, from $32 million to more than $38m.

Mr Mumford said the UDV had already agreed to back the national council of the Australian Dairy Farmers lobby – representing Victoria, Tasmania, South Australia, NSW, Queensland and Western Australian – to demand processors contribute at least $5 million to DA, given its post farmgate work was worth close to $10 million.

“Over the last 20 years dairy farmers and tax payers have contributed close to $1 billion to Dairy Australia, while processors have effectively contributed nothing,” he said.

Forcing processors out of DA would require amendments to its constitution at a general meeting, which could be called by 100 farmer members.

Farmers say the big question is will the national council and ADF follow through and act on an ultimatum if processors refuse to contribute.

ADF has been calling on processors to contribute to DA since 2019, when it lodged a submission to the Federal Government’s inquiry into modernising research and development corporations.

At the time ADF stated DA’s post farmgate program was valued at $9.7m and it believed “government should mandate processors to pay levies for post farm gate programs delivered by their RDC (Dairy Australia)”, highlighting that Australia’s red meat processors already faced a mandatory levy.

In May last year the Australian Dairy Products Federation, representing processors, said it was engaged in a due diligence project with DA to understand the value of its work to Fonterra, Saputo and others.

But as of last week ADPF stated it was still working through their approach and it was not the right time to discuss any processor contribution.