January 2016 President's Message

Jan 25, 2016

Welcome to the New Year. I hope you have all had the chance for a short break at least, and are ready to work together to tackle the challenges and opportunities that 2016 brings.

In recent years, Australian Dairy Farmers (ADF) has strengthened dairy’s ties with Canberra to raise the profile of the issues that matter most to our farmers. ADF has maintained our reputation of acting apolitically, being accessible to all politicians, and being willing to listen.

This year we will continue to build this profile, while simultaneously building on our capacity to deliver value to members.

So far in 2016, key members of the ADF team have visited members in central New South Wales. In February our CEO will visit Western Australia – to talk and listen about priorities for the year ahead. These are the first of many 2016 interstate meetings to follow.

I encourage you to take the opportunity and introduce yourself to our team. The passion and commitment that the ADF staff has to help achieve a stronger future for our industry is evident, and we are all prepared to listen to your thoughts, ideas and constructive feedback.

The beginning of the year has been challenging for farmers. Extreme weather conditions brought drought or very dry conditions in Tasmania, West Victoria, South Australia as well as savage bushfires in Western Australia. ADF is seeking to assist its state members with recovery efforts. I commend the efforts of WA Farmers, Western Dairy and Dairy Australia, in providing practical support and counsel to the affected farmers in WA.

Events like these are a timely reminder that so many aspects of our business are affected by elements beyond our control. ADF is committed to ensure that farmers have the information and resources they need to take control of what they can. Dairy Australia also has a great resource of tools and information to assist in preparation and recovery.

In February, ADF will host an environmental scanning and industry planning workshop with key stakeholders such as our state members and Dairy Australia. These sessions will aid in setting our advocacy priorities for 2016, to establish a sound policy platform which ensures we can capitalise upon growth opportunities delivered by 2015’s advocacy.

I look forward to getting out and about in order to meet with as many members and non-members as possible over the course of 2016 to ensure ADF can continue to deliver value for the industry.

Simone Jolliffe

ADF President

ADIC re-forms Water Taskforce

Jan 24, 2016

Over the course of 2015, the Australian Dairy Industry Council (ADIC) increased its advocacy focus on the impacts of the Murray Darling Basin Plan (MDBP) and the need for changes to the Plan and its implementation.

Significant achievements were made in 2015 with the Federal Government committing to legislation to cap water buybacks in the MDBP at 1500 gigalitres (GL). Further, indications that more flexibility will be provided for environmental water trading were welcome. However, the ADIC still has concerns regarding the MDBP’s unrealistic timelines as well as a lack of planned transition and structural adjustment.

2016 is a critical year in the Plan’s implementation. The deadline for the Sustainable Diversion Limit (SDL) adjustment mechanism is imminent. Progress with state offset projects leading up to this June 2016 review is also of significant concern.

Secure access to quality water is paramount to dairy’s future. Reduced access to the water resources the industry relies on will impact dairy’s profitability, productivity and international reputation. To ensure that the dairy industry’s key priorities are effectively represented and addressed in this discussion, the ADIC has re-formed its Water Taskforce.

The ADIC Water Taskforce, chaired by Victorian dairyfarmer Daryl Hoey, provides a cross-industry group to support the ADIC in driving for pro-dairy solutions in current and future opportunities for review and change.

The priorities of the Taskforce for 2016 are to seek a review and delay the 450GL ‘upwater’ as part of a stock take to better understand the effects (both positive and negative) of water recovery. Further, the Taskforce will also push for the delivery of the full 650 GL in environmental offsets to ensure any shortfall does not have to be covered by farmers. Other targets include a more transparent water market and information as well as ongoing monitoring and support for regional and state water programs including the Northern Basin and Menindee Lakes and Connections Reviews.

For further information about the ADIC’s Water Taskforce contact the ADF Office via (03) 8621 4200.

Water Act Review Progresses but more still to be done

Dec 21, 2015

The Coalition’s response to the independent review of the Water Act 2007 was released in December 2015. The Government’s decision to adopt all of the recommendations, some wholly and others partially, including to provide greater trading flexibility for the Commonwealth Environmental Water Holder (CEWH), is positive new for Australian dairy farmers.

The Australian Dairy Industry Council (ADIC) has lobbied hard for increased flexibility for the CEWH in optimising environmental outcomes in ways that ensure dairy producers have better access to water supplies. Dairy has proved a flexible and responsible user of water. We have adapted our practices to be more water-efficient. However, reduced access to water resources is already putting pressure on dairy’s productivity and profitability. This CEWH flexibility is key to helping our industry remain viable. It will also ensure a balanced approach to achieving environmental outcomes in the Murray Darling Basin.

The Government’s stated commitment to continue to work towards achieving a total 650GL supply offset is also positive. Achieving the full amount through environmental works means more water stays in the irrigation pools.

Chair of the ADIC’s Basin Taskforce, Daryl Hoey described the response as a positive first step but highlighted greater improvements in the implementation of the Act and the Murray Darling Basin Plan are still required.

“That the Government didn’t agree with the submissions of many to amend the Act to unambiguously state a triple-bottom-line objective or to strengthen the current implementation of the legislation is of concern. Such an approach is critical,” Mr Hoey said.

“It’s good to see the Government amend timelines to some evaluations and reviews under the Act. We now need such revisions to be applied to all elements of the Act.

“In particular, there is a need for a robust evaluation of environmental, economic and social impacts before considering an additional 450 gigalitres (GL) of water being taken from agriculture.”

To see the ADIC submission to the Water Amendment Bill 2015 click here.


Pressing pause on the Basin Plan

Nov 01, 2015

The Australian Dairy Industry Council’s (ADIC) has expressed concern in a submission to the Senate Inquiry into the Murray-Darling Basin Plan, regarding the impact of the Basin Plan on dairy business viability.

In the submission the ADIC states its support for a plan with clear and appropriate targets to recover water for the environment provided farms remain viable. So far, more than 1160GL of a possible 1500GL transferred from irrigation to the environment through buybacks.
 
Dairy farmer and Chair of the ADIC Water Taskforce, Daryl Hoey said in its current form the Basin Plan isn’t achieving the right balance, setting unrealistic timelines as well as a lack of planned transition and structural adjustment.

“A significant pain of adjustment is already being felt in the dairy industry, even if no more water is transferred from the irrigation pool across to the environment,” Mr Hoey explained.

“We can clearly see the impacts on dairy farming systems through exposure to higher water prices, a more volatile temporary water market; reduced viability of some irrigation districts; and overall, difficulty in growing our milk production.”

Dairy Australia analysis indicates that, based on conservative estimates, the 120GL of high reliability water entitlements dairy farmers in the Goulburn Murray Irrigation District sold to the Commonwealth as buybacks, could have resulted in the production of an additional 289 million litres of milk if those entitlements were still owned. That 289 million litres of milk would be worth approximately $144 million at the Farmgate.
Farmers in the same district are now sourcing around 275 GL a year from the temporary market to meet their needs (due to reduced ownership of entitlements) have added a cost impost of $41million at $150/ML. On 12 October 2015 temporary water was trading at $300/ML.

The ADIC is calling for Government to “press pause” on the Basin Plan to ensure it can achieve the right balance, and therefore achieve genuine outcomes.

“To get the Basin Plan back on track we need more realistic timelines and a clearer picture of socio-economic and environmental effects before more water is taken from the irrigation pool,” Mr Hoey said.

“This includes a clearer understanding of the water market and more appropriate approach to the 450GL “upwater”. We are also seeking greater flexibility to trade environmental water and an appropriate sustainable diversion limit adjustment mechanism.”

The ADIC has welcomed the Commonwealth Environmental Water Holder’s decision to sell 20 GL of temporary water in the Goulburn system, which will enable more trading of temporary water. However, the ADIC said it is vital producers in the region benefit from the availability of this water through a fair process to trading the water.

Representatives from the dairy industry are seeking to attend the Murray Darling Basin Plan Senate Inquiry hearings scheduled in November. To see the full recommendations from the ADIC submission see http://www.australiandairyfarmers.com.au/submissions

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