Government needs to play the right role
The preceding chapters of this report have identified that, for the
dairy industry to grow and prosper into the future, it is the industry's
responsibility to rebuild trust, increase transparency and improve consumer
awareness. That said, there is a role for government to provide a legislative
and regulatory structure which can reduce the power imbalances between
stakeholders, reduce market distortions and promote innovation. Further, governments
can also assist by supporting research and development activities, and
improving knowledge transfer about market conditions.
Direct government intervention—milk levies and floor prices
Direct intervention is one approach that governments can take to
intervene when markets do not appear to function correctly. Mr Rhys Palmer
provided his view on how regulation and subsequent deregulation had contributed
to the current state of the dairy industry:
Deregulation never hurt anybody; what hurt was regulation in
the first place. They had farmers milking cows in areas that were not conducive
to doing so and getting paid to do it. Look at the stuff-up it generated in the
finish. It generated deregulation in which everybody got hurt.
Indeed, many of the issues faced by dairy farmers in Western Australia
and Queensland can be attributed to government intervention.
The QDO recognised this but advocated for a market based solution, not more
... deregulation laid the groundwork for the state we are in
now. But the dairy industry has not looked for re-regulation. We are prepared
to live, I think, in a fair market, a free and fair market, but the 'fair' part
is the bit that we really want to focus on. In a lot of
other parts of the world the dairy industry is not regulated, but they operate
in a market where there is more market power in the farm sector. I think that
is what is missing in Australia.
It is unsurprising then that many stakeholders were against direct
government intervention in the industry in the form of milk levies and floor
prices. For example, Fonterra was not in favour of measures that could be
We note in particular the proposed introduction of measures
such as a floor price for milk or a 50 cent levy on the sale of fresh milk,
with proceeds directed to an emergency fund to assist dairy farmers.
We do not support these proposals. We are concerned they
would be steps towards re-regulation of the dairy market that would jeopardise
our international trade agreements and undermine Australia's competitiveness.
When questioned, there was limited support from farmers for the introduction
of a floor price:
No, I do not believe there is a case for a floor price. We
have seen what happened to the wool industry with a floor price...It is about
companies getting the right product mix.
If a floor price or regulated market were to create an
increase in the price of entry into our dairy industry, we may not have enough
new farmers coming in to sustain our milk production.
That said, Mr Lionel Harniess took a different view to contend that a
floor price must reflect a fair milk price to the farmer, the processors and
We have been in deregulation for some 16 or 17 years now. It
has been a race to the bottom, and here we are. Quite bluntly, it has not
worked. We need to go back into regulation and quota.
Throughout the inquiry, Farmer Power advocated for the introduction of a
levy on fresh drinking milk sales to 'stem the exodus of farmers from the
Farmer Power has suggested that the previous levy on the
price of milk could be introduced as a temporary intervention measure, until
such time as a more permanent industry solution can be found. A 50c per litre
levy could be redistributed to all dairy farmers providing a top up payment of
around 12c per litre, which would bring farmgate milk prices to a more sustainable
Farmer Power explained that any money from a levy on fresh drinking milk
could be effectively used as an insurance policy to support farmers:
You can bank the money away in good years, and in the bad
years we can withdraw from it...
The Department of Agriculture and Water Resources cautioned against such
The Australian government would need to be satisfied that the
benefit to industry from such a levy would outweigh any other industry of
For example, the imposition of a levy on domestic drinking
milk risks distorting market signals along the dairy supply chain, being a
disincentive to improved productivity, and impeding international
competitiveness. Further, it may have unintended consequences of reducing
consumption of fresh milk, damaging the profitability of dairy farmers and
squeezing supply chain margins further. Such a levy would also make it
difficult for Australia to advocate against domestic dairy support measures in
other countries when negotiating trade agreements.
Dairy Connect explained that previous milk levies had not worked for
farmers and, as such, were reluctant to support any reintroduction of milk
Mr Chris O'Keefe also opposed the imposition of a compulsory consumer
levy for a number of reasons including the precedent it could set for other
industries that suffer 'bad' times.
An outcome of the intense competition for milk between processors in the
Southern Milk Region appears to be that milk prices have been more variable as
processors ride the highs and lows of the market. However, the overwhelming
view of farmers was that rather than regulation and government intervention,
they would prefer to have a more stable and higher farm gate milk price. In
this regard, industry leadership, as outlined in previous chapters, is
necessary to bring greater stability to farm gate milk prices and restore
farmer confidence through processors offering longer term contracts at
sustainable prices. As such, the committee does not consider that direct
government intervention, either through a floor price or milk levy, is
Encouraging a level playing field
While direct intervention may not be appropriate, the government has
taken steps to reduce power imbalances and discourage anti-competitive
behaviour by legislating unfair contract terms and introducing legislation to
implement an effects test. While these initiatives are not directly aimed at
the dairy industry, they have the potential to affect stakeholder behaviour.
Unfair contract term laws
Unfair contract terms are instrumental in creating and sustaining power
imbalances between contracting parties. In the context of the dairy industry,
farmers and representative bodies raised concerns about unfair contract terms.
For example, Dairy Connect noted:
When you ask the processor, 'Is this contract or agreement
legal?' they basically come back and say, 'Well, nobody has contested it.' That
is basically because we are all individual farmers and we do not have the
capacity or the strength to go out there and challenge multinational companies
and other large companies that want to stand by these agreements...
That said, some stakeholders were optimistic that the recent unfair
contract term amendment to the Australian Consumer Law (ACL) could be applied
to milk supply contracts. The amendment, effective from 12 November 2016, aims
to protect farmers and small businesses from unfair contract terms in standard
The law aims to address some of the power imbalances that exist in business-to-business
Section 24 of the ACL provides that contract terms will be unfair if:
it would cause a significant imbalance in the parties' rights and
obligations arising under the contract;
it is not reasonably necessary in order to protect legitimate
interests of the part who would be advantaged by the term; and
it would cause detriment (whether financial or otherwise) to a
party if it were to be applied or relied upon.
The law applies to standard form contracts where at least one of the
businesses involved employs less than 20 people, and the price payable under
the contract is more than $300 000, or $1 million if the contract is for
more than 12 months.
Given that a standard form contract is prepared by one party and the
other party has little or no opportunity to negotiate the terms, the ACCC is of
the opinion that milk supply agreements are likely to be considered standard
form contracts for the purpose of the law.
In relation to the applicability of financial thresholds to standard form
contracts, the ACCC noted that:
For the purposes of determining whether a contract fall under
the relevant threshold to meet the definition of a 'small business contract',
any amounts that cannot be calculated with certainty at the time the contract
is entered are unlikely to be included in the calculation of the upfront price
payable. Given the value of milk supply agreements typically cannot be
calculated at the time of entering into the agreement, it is arguable that such
agreements will fall within the scope should other thresholds be met.
The ASBFEO commented that the application of the unfair contract terms legislation
to the dairy industry was not clear:
It is also important to monitor how the unfair contract terms
legislation applies to industry contracts. Given that milk prices are generally
set on a daily basis, there is an argument that the contracts are effective
separate daily (standard form) contacts that would each fall within the
$300 000 threshold. If this is the case, a number of existing contractual
terms may be made void, such as clauses that provide for:
- limited (or no) notice of price and service changes;
- contract lock‑in; and
- unilateral contract variation.
Similarly, Primary Industries and Regions South Australia (PIRSA)
It would be beneficial to understand whether this legislation
will assist in preventing future hardship for dairy farmers due to their milk
supply contracts. If this is not the case, amendments or new legislation should
The ACCC outlined the complex process for determining whether terms are
In deciding whether a term is unfair, consideration must be
given to the transparency of the term, and the overall rights and obligations
of each party. Further, the fairness of a particular term must be addressed in
light of the contract as a whole.
In order for the ACCC to form a view on whether specific
contract terms are unfair, the ACCC must undertake a detailed assessment of the
specific contracts and all the surrounding circumstances.
The committee welcomes the introduction of unfair contract term laws and
looks forward to its application to milk supply agreements and contracts within
the dairy industry.
While noting the complexities associated with the application of the
unfair contract term law to the different milk supply arrangements in the dairy
industry, the committee considers that the ACCC is best placed to undertake
such analysis, particularly as part of its inquiry into the dairy industry, and
expects that the ACCC report will provide clarity for farmers and processors
regarding the application of the law to milk supply agreements and contracts.
The committee considers that there would also be value in the ACCC
providing guidance as to how model milk supply agreements and contracts could
be developed under the code of conduct for contractual relationships to comply
with unfair contract term laws.
The committee recommends that the ACCC specifically address the issue of
unfair contract terms within the dairy industry and provide guidance as to whether
milk supply contracts, in-principle, fall under the scope of the unfair
contract term laws. Further, the ACCC should provide guidance as to how milk
supply agreements and contracts could be developed under a code of conduct for
contractual relationships to be compliant with unfair contract term laws.
Effects test legislation
The effects tests seeks to amend section 46 of the Competition and
Consumer Act 2010 to strengthen the prohibition of the misuse of market
power by corporations and better target anti-competitive conduct by
corporations with a substantial degree of market power.
A number of stakeholders noted that the introduction of an 'effects
test' into competition law may address issues related to the sale of private
label and branded dairy products. The QDO considered that:
In an Australia without an 'Effects Test', large and powerful
companies can unfairly damage supplier and small competitors and our ACCC
cannot prove anti-competitive intent or 'purpose' even though the 'effect' is
The QDO advocated for the setting of retail milk prices that reflected
the cost of production in each region:
Retail prices of fresh white milk should reflect the cost of
selling the milk in each region that it is sold to allow dairy farmers, all
retailers and all milk brands to compete on a level playing field.
Concerns were also raised about the standardised retail pricing of
products across Australia. WA Farmers questioned how a nation-wide retail price
of $1 per litre could reflect the cost of production, particularly in regional
With expanding the dollar-a-litre stuff across to Coles
Express and to Woolworths Caltex, or whatever, those places were maintaining a
high value because it was convenience price. So, at a Coles Express in
Kununurra at midnight, you could get milk for $1 a litre. So I would suggest
that in this state, if the true cost of retail and transport was applied to
milk, it would be sold at a loss in every regional town in the state. When they
do their justification for it, it may work in Victoria. And I think it does
work in Victoria. But it does not work here [in Western Australia]; it does not
work in Queensland.
Indeed, Coles expressed concerns about the potential ramifications
following the introduction of the effects test:
We have been particularly concerned about the impact it may
have on state‑based pricing. State‑based pricing is basically our
policy whereby we charge the same for all our stores, with the exception of
some fruit and vegetables, regardless of where you live...
Coles went on to explain their approach moving forward:
One of our main concerns we have raised is the unintended
consequences of placing this legislation through parliament...We really pride
ourselves on our customer offer and the fact that we do not discriminate
against customers on the basis of where they live. But this will ultimately be
a matter for the courts when we see the first test cases coming through over
the next few years.
In considering the potential impact of the introduction of an effects
test on the agricultural section, the Productivity Commission concluded that:
...perceptions in the agricultural sector that the introduction
of an effects test will shield farm businesses from intense competition are not
well supported by the evidence.
The Competition and Consumer Amendment (Small Business Access to
Justice) Bill 2017, a private members bill passed by the Senate on 10 August 2017,
provides an alternative to the effects test. The bills seeks to address the
unfair playing field between large and small businesses by allowing judges in
the Federal Court to waive liability for adverse costs to small business
private litigants in cases related to the misuse of market power. It would also
allow the Australian Small Business and Family Enterprise Ombudsman to provide
assistance to small businesses in preparing these cases.
The committee considers that the introduction of an effects test has the
potential to create risks for businesses that seek to lower prices for
customers and could set a dangerous precedent which ultimately hurts consumers;
however, it notes that an effects test was legislated in August 2017. The
committee remains concerned that issues associated with the implementation of
an effects test, such as state-based pricing and the potential costs on
businesses litigating breaches, need to be resolved in a timely manner to
reduce uncertainty and the potential impact on retailers, processors and
The committee also considers that the measures contained in the
Competition and Consumer Amendment (Small Business Access to Justice) Bill 2017
have the potential to appropriately address power imbalances between large and
small businesses and recommends that the House of Representatives pass this
The committee recommends that the House of Representatives pass the
Competition and Consumer Amendment (Small Business Access to Justice) Bill
Encouraging expansion in dairy cooperatives
As a result of rationalisation and privatisation, only two dairy
cooperative processors of scale remain in the Australian dairy landscape—Murray
Goulburn and Norco. Cooperatives exist to benefit members and structure their
operations accordingly. For example, Norco outlined that:
Norco's primary concern is to maximise the farm gate returns
of our members because unlike non-co-operative structured dairy processors, we
do not have to satisfy the needs of external shareholders who do not have a
vested interest in the dairy industry.
Some submissions supported the cooperative model and advocated for its
expansion. For example, Lindsay Jarvis and Ann Jarvis noted that the
cooperative model provided entry and exit points for people moving through
We believe in the culture of co-operatives as being the way
of the future...
Lindsay Jarvis and Ann Jarvis also highlighted the importance of having
cooperatives in the dairy industry in terms of farm gate pricing:
When strong co-operatives exist in the marketplace, it
ensures all players must maintain competitive prices. Without this ethic,
suppliers would be exploited for the benefits of non‑industry
Norco also sees a role for cooperatives as part of the future of the
It is Norco's view that the Australian dairy industry needs a
strong and vibrant co-operative sector. The events of the last six months are
regrettable and are likely to have long lasting consequences. It is imperative
we learn from these unfortunate events and it is even more important to move on
and focus on the issues that will put confidence back into the dairy industry
Indeed, Norco explained how it had expanded recently:
...even though it is widely reported that the Queensland dairy
industry is in decline, Norco's farm gate pricing and co-operative model are
seen as attractive propositions. Norco is proud of the fact that we support new
start‑up farms and some 14 new start‑ups have commenced milk supply
with Norco in the last few years. This demonstrates that the co-operative model
is becoming better known and recognised as a sustainable business model.
Norco outlined the challenges they considered to the establishment of
To start any business requires a level of investment, and the
challenge that has always existed in a farming community in agricultural
cooperatives is: do you invest in your farm or do you invest in the
co-operative, especially if they are growing or actually requiring a capital
investment? Then, on the other side of it, if you take that capital investment
and put it into the cooperative, for which you need physical assets—in some
instances, to manufacture product—then where does the capital actually come
from in that scenario? That is the difficulty cooperatives have traditionally
had in Australia, especially for younger farmers growing in the system, and how
they actually fund that.
In order to help strengthen the cooperative model, Norco advocated for
tax incentives for members to invest in their cooperatives:
Norco is of the view that the Senate Committee should
consider the point that if co-operatives are to resist external equity and the
inherent conflict this brings, it should consider recommending that the members
of co-operatives are given tax incentives to invest in their co-operative. At
present any investment by members is seen as a capital item and therefore
attracts normal tax rates.
The committee considers that the cooperative model has an important role
to play in agricultural industries, provided these organisations are managed
appropriately. As such, the committee commends the findings of previous inquiries
undertaken by the Senate Economics References Committee and supports the
expanded use of the cooperative business model.
Specifically in relation to cooperative models in the dairy industry, the
committee concluded in 2010 that:
The interests of farmers would be better served if there were
more processors and preferably more of them in the form of cooperatives.
This committee has also previously inquired into the Australian
cooperative sector in 2015. That inquiry concluded that there were significant
barriers to growth and innovation by cooperatives, including in the
establishment of new cooperatives. That inquiry recommended, among other
things, that governments develop a program of supports to encourage the
establishment of new cooperatives and reduce barriers to growth, particularly
in accessing capital.
The committee notes that the government is undertaking consultation on
potential reforms to identify and improve access to capital by cooperative and
mutual organisations. The committee understands that this report has been
submitted to the Treasurer and looks forward to its public release.
The committee recommends that the government prioritise action to reduce
the regulatory burden across the cooperative sector and support programs to
facilitate the establishment of new cooperatives.
Monitoring and enforcement by regulatory agencies
The roles, responsibilities and effectiveness of regulatory bodies
overseeing conduct within the dairy industry were raised as areas of concern,
particularly in relation to investigating the conduct of Murray Goulburn and
Fonterra. For example, Dairy Connect was critical of the powers available to
Anticompetitive behaviour is still there in form, but what we
do need to see is that the ACCC is able to be given some teeth that can ensure
that such things as collective bargaining, such as the effects clause that has
been introduced, can provide a way forward that can have an outcome that is
Public perceptions of the ACCC did not give farmers a sense of
confidence that justice would prevail:
My other formal point is the ACCC. When are they ever going
to put some teeth into those fellas instead of paying them money? Take them to
the dentist, for goodness sake, get them some teeth because they have got
absolutely no teeth whatsoever.
Concerns about the timeliness of ACCC and ASIC investigations were also
We had the right honourable Sarah Henderson at a meeting in
Alvie. She affirmed to us that the ACCC would have a verdict on Fonterra and
Murray Goulburn within weeks, and that was back in May . I have since
hounded her and hounded her, but we still have not seen anything.
Indeed, despite repeatedly indicating that the results of any
investigation would be available before the end of 2016, the ACCC did not make
any public statement about the investigation until 28 April 2017, where it
announced publicly that it would take action in the Federal Court against Murray
Goulburn, former Managing Director Mr Gary Helou and former Chief Financial Officer
Mr Bradley Hingle.
To date, ASIC has not yet released the findings of its investigation.
The timeliness and transparency of investigations by the ACCC and ASIC
is a longstanding concern and is certainly not limited to the dairy industry.
However, the dim view that many stakeholders have of these regulatory agencies
and the prolonged nature of any investigation of substance raises questions
about whether regulatory agencies could be more transparent during the course
of any investigation.
That said, it is important to consider whether greater transparency has
the potential to undermine the integrity of investigations or unfairly besmirch
the reputations of individuals and businesses associated with being under
Regulator transparency and timeliness issues are not new. Indeed, the
committee's 2011 report into the impact of supermarket pricing decisions on the
dairy industry concluded that:
...there is some scope, albeit limited, for additional
transparency of the ACCC's enforcement activities. Improvements to the way the
ACCC releases this information could help ensure that the public is confident
that matters are being taken seriously, and increase the accountability of the
That inquiry went on to recommend that:
...the ACCC review its approach to releasing information about
its investigations with a view to providing greater information about its
current enforcement activities and relevant issues of particular concern.
While the government of the day supported transparency where possible
and appropriate, it acknowledged that actions to improve transparency were
ultimately a matter for the ACCC as an independent statutory agency. Based on
what has been observed over the last 12 months in relation to the dairy
industry, it would appear that the ACCC has not taken steps to improve its
practices in this regard.
The committee is concerned that, where livelihoods of farmers are at
stake and where public confidence in the regulatory system appears to be
undermined, regulatory agencies are letting Australian farmers down.
The committee is of the view that the ACCC should take a more proactive
approach to informing affected parties of how an investigation is progressing.
It is unacceptable that it should take almost 12 months to initiate action in
what, to many stakeholders, appeared to be a straightforward case of engaging
in unconscionable conduct and making false or misleading representations.
Similarly, the committee is concerned and frustrated that despite
significant additional funding, ASIC also appears to not be able to meet
reasonable timelines nor provide pubic updates on the progress of
As with the committee's last report into the Australian dairy industry
in 2011, it now again recommends that public confidence in regulatory
investigations by the ACCC and ASIC needs to be improved through making better
and more timely public statements on key matters to help inform the broader
public debate on such issues.
The committee recommends that regulatory agencies, particularly the ACCC
and ASIC, review their approach to publicly releasing information about
investigations, with a view to providing greater general information about
current enforcement activities and relevant issues of public concern.
Dairy Commodity Price Index
As discussed previously, there is an onus on processors to keep supplier
farmers informed about the state of the market and provide timely updates on
potential changes to the farm gate milk price. However, the government also
considers that it has a role in increasing transparency about dairy prices and
has committed $1 million to establish a commodity milk price index as part
of the Dairy Support Package:
...the index would introduce greater transparency and market
signals in domestic and global milk prices.
Further, the proposed milk price index would:
...provide dairy farmers with valuable information for use in
supply negotiations with processors and...assist in following international price
Despite this commitment, some stakeholders were not convinced that a milk
price index would be beneficial. Mr Peter Laverty noted that there were a
variety of issues which complicate the development of such an index including:
the range of products that milk can be manufactured into;
the prices of dairy commodities do not move in parallel; and
farm gate milk prices are influenced by manufacturing costs
(including overheads) and milk collection costs.
Mr Laverty concluded that:
...it is difficult, if not impossible, to develop a farm-gate
milk price index which provides reasonable guidance to dairy farmers. In any
event, once the cows are joined and a season has started, a dairy farmer's
ability to vary milk production and inputs is limited.
However, Mr Laverty suggested that improved communication would assist
farmers to monitor the fairness of prices and/or minimise their risk to help
them make better investment decisions.
This sentiment was echoed by Mr Paul Weller:
Our business suffered last year because we were buying water
and buying hay and buying grain on the assumption that we were going to get a
$5.60 a kilo milk solids price. Then, two months from the end of the year, we
were told it was $4.80. I had already gone and bought my water, bought my hay
and bought my grain. So a price index would be good for farmers to use as
information, but it needs to be accurate.
Mr Ben Govett also highlighted some of the shortcomings with a dairy
Having an index that tells me the milk price is going to go
down in six months does not help my business if I have no money to plan for it
anyway. I do not think the majority of farmers, before this milk price drop,
would have had reserves of capital to either do quick improvements or improve
efficiencies et cetera to plan for this. I think the industry has gone through
a pretty lean time, so I do not think that would have helped.
Dairy Australia was cautious of supporting a dairy price index as
processors have different product mixes which influence the value of raw milk:
In Australia, 65 per cent of what is produced is sold
domestically. It is in very different product mixes. We have many more
manufacturers, so it is much more complex. I am not saying an index cannot be
determined and cannot be worked up. Whether it is a true picture of the
industry in Australia is just another question.
Fonterra told the committee that:
Within our own business, our suppliers told us they wanted
clearer price signals so that they could plan ahead with greater certainty, so
we introduced a monthly Australian Global Dairy Update, which includes
information on market conditions, commodity prices, currency and input costs—the
factors that influence the cost of production and farmgate milk price towards
providing greater transparency on price so that suppliers better understand how
their milk price is determined.
While the committee can see merit in increasing the information
available to farmers, it questions whether a Dairy Commodity Price Index is the
best approach to assist farmers given the unique product mixes of different processors
and associated manufacturing costs. Indeed, the proposal for a Dairy Price
Commodity Index seems to be a knee-jerk reaction to an isolated incident caused
by poor management and distorted incentives.
Rather than developing a Dairy Commodity Price Index, the committee
considers that improving relationships between farmers and processors in
regions where the farm gate milk price fluctuates would be a more effective and
efficient way of increasing transparency about market conditions in the dairy
industry and its potential impact on farmers.
The committee considers that the proposed Dairy Commodity Price Index is
of limited value and its development should not be continued.
Role of Dairy Australia
Dairy Australia is the dairy industry's service organisation, providing
pre‑competitive services to help farmers adapt to a changing operating
environment, improve farmer profitability and protect the future sustainability
of the industry. These services include:
Supporting productivity initiatives and facilitating innovation
on farm to improve productivity.
Gaining market intelligence to help farmers prepare and plan for
Creating and maintaining access to preferred high value export
Encouraging consumption of dairy products through protecting and
promoting the industry and implementing health and nutrition programs.
Protecting the reputation of the industry and encouraging demand
for its products.
Dairy Australia has no involvement in market pricing and commercial
arrangements but actively collaborates with industry representative bodies to
help improve the position for farmers.
Dairy Australia is funded by the Dairy Services Levy ($34 million),
government support for research and development ($19 million), and funding at a
project level from state governments, universities, research organisations and
other dairy support organisations ($20–30 million).
A number of stakeholders were critical of Dairy Australia and the levies
paid by farmers to support it. For example, Mr Alex McKenzie submitted that:
Farmers have levies deducted from their milk cheque to fund
bodies like Dairy Australia. Dairy Australia has invested near 750 million
dollars since its inception, with little or no benefit to the average farmer.
Many would say if Dairy Australia were not there it would not be missed.
Parmalat Australia was critical of Dairy Australia and other leadership
While organisational leadership in the processing sector is
one aspect, the industry structures that should help drive and create sensible
whole of industry policy are in our view poor when compared to the EU, NZ or
the US. Dairy Australia needs an overhaul. It no longer represents the interest
of the 6 states and its relevance in delivering unified industry policy is
questionable. For instance the work of DA in export support and development is
virtually irrelevant to Qld dairy farmers who have a wholly domestic focus...
In trying to be all things to all farmers Dairy Australia is
significantly conflicted by highly differing agendas.
There were also some concerns that Dairy Australia were not making the
best use of their funding to benefit farmers:
...they pay $300,000 a year in car parking. What has research
and development got to do with car parking?
The committee recognises the role that Dairy Australia plays in
providing pre‑competitive services to the dairy industry and the support
it enjoys from some industry stakeholders. However, the committee is concerned
that Dairy Australia may not be making the best use of the levies paid by
farmers, many of whom are facing financial difficulties and challenging
The committee recommends that an independent review of the Dairy Services
Levy and Dairy Australia be undertaken by government to provide assurance to
dairy farmers that they are receiving value for money from the Dairy Services
Levy and the benefits of the levy are being fairly distributed across farmers
in all dairy producing regions.
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