Dairy industry showdown looms over major funding contributions

Dairy farmers will vote next month on removing processors from Dairy Australia. Here’s why DA has changed its approach.

A controversial new vote on whether to kick out the Australian Dairy Products Federation as a Class B shareholder of Dairy Australia will be held next month.

Dairy Australia chairman Paul Roderick has confirmed the ADPF shareholder ballot will be held next month at the authority’s annual general meeting in Wollongong - but the DA board won’t take a side, leaving it up to the farmer electorate.

While farmers contribute about $30m a year to DA in levies, matched by about $20m from the federal government, dairy lobby groups including United Dairyfarmers of Victoria say processors pay virtually nothing to DA.

Dairy Australia chairman Paul Roderick.

Mr Roderick said the vote acknowledged farmer frustration that ADPF and processor financial contributions to Dairy Australia remained “significantly lower than those made by farmers”.

He said the vote was “a decision solely for farmers”, remaining impartial in 2025 after the board indicated its opposition to removal at the 2024 annual general meeting.

The 2024 Warrnambool vote failed to get across the line but Mr Roderick’s predecessor James Mann indicated DA would show less leniency if ADPF failed to pay by November 2025.

“Over the past year, Dairy Australia has held extensive discussions with ADPF and processors regarding investment in Dairy Australia services,” Mr Roderick said.

“Unfortunately, we haven’t received a funding commitment that we could comfortably call co- investment and does not reflect the value Dairy Australia provides across the supply chain.

“Although we’re disappointed with the progress, we continue to see value in working together as an industry.”

“The Dairy Australia Board will not adopt a collective position on this resolution.

“Voting will be left entirely to dairy farmers, as the primary funders of Dairy Australia.”

Earlier this year, UDV president Bernie Free indicated he would revive a vote to remove the ADPF if DA did not.

Mr Free said the ADPF and processors indicated back in 2019 they would come to the party in making some form of contribution to DA.

“This is pretty weak from Dairy Australia — they should endorse the ADPF’s removal given the ADPF have failed every year for nearly six years to fulfil their promise,” the UDV president said.

ADPF executive chairman John Williams said the federation and its members were deeply disappointed by the resolution.

“ADPF fears this proposal – from our partner advocacy body under the Australian Dairy Industry Council – risks creating division within the industry, at a time when unity and collaboration are essential to driving progress,” he said.

“Since the AGM in November last year, ADPF has taken clear action:

“We established a task force with representation from Dairy Australia, ADPF and dairy processors to develop a sustainable and ongoing program of work and funding proposal.

“We continue to co-invest in whole-of-supply chain initiatives.

“Furthermore, we submitted a financial proposal to Dairy Australia for the current financial year.

“With government focus on productivity and food security, we have an enormous opportunity to drive change and feature dairy front and centre.”