Trade reforms a positive kick start for 2016

Jan 23, 2016

Over the course of 2015, Australian Dairy Farmers (ADF), together with state members and industry partners has worked collaboratively with government to broker new trade deals which increase access to key Asian markets hungry for safe, clean and sustainable Australian dairy produce.

ADF welcomed the China-Australia Free Trade Agreement (FTA) which entered into force on 20 December 2015, followed quickly by a second round of tariff reductions on 1 January 2016.

Also on New Year’s Day, the Korea-Australia FTA progressed to its third year of benefits for dairy exporters, meaning further tariff reductions and increased quotas for a range of Australian dairy exports.

Similarly, the Malaysia-Australia FTA moved into its fourth year of implementation, translating to further increased liquid milk tariff rate quotas. The Thai-Australia and US-Australia FTA’s also celebrated a milestone in passing the 10 year point, and provided improved duty free quotas for Australian dairy.

Further to this, the finalisation of the Trans-Pacific Partnership negotiations in late 2015, plus the late December announcement of an agreement to abolish government subsidies on agricultural exports through the World Trade Organisation.

The Australian dairy industry still faces challenges in its export focused markets, especially with regard to technical barriers to trade which translate to higher production costs, reduced product returns and restricted export demands all combine to lower milk returns for farmers.

With these challenges in mind, ADF is celebrating the progress made in trade reform to the long-term benefit of our industry. This progress boosts the industry’s competitive position in the global market and contributes to building confidence to invest in a strong future for Australian dairy.

For more information on ADF’s Markets Trade and Value Chain priorities, click here.

ADF supports measures to balance misuse of market power

Aug 05, 2015

Over the past four years, competition policy has been the focus of a Government overhaul, with the intention of preventing situations such as the $1 per litre milk campaign – a damaging state of affairs for dairy farmers which highlighted the significant imbalance of market power between retailers and suppliers in the grocery supply chain.

This year, there have been significant developments with Australian Dairy Farmers (ADF) welcoming the announcement of the Competition and Consumer (Industry Codes – Food and Grocery) Regulation 2015 on 2 March 2015, as a constructive first step toward addressing the imbalance of market power between retailers and suppliers.

Further to this, the Australian Government has sought to overhaul competition law and policy in Australia with the introduction of the independent Harper Review of Competition Policy.

The clear intent of the major retailers’ strategy is to extract as much value as possible from the supply chain with consequent pressure on those at the start of the chain, namely farmers. They are also seeking to increase their own market share to the detriment of competitors and to increase the share of home brand products in store.

Given this it is important that the Australian Competition and Consumer Commission (ACCC) has the ability to examine the impact of such strategies in the longer term, with particular emphasis on the impact on consumer choice, farmer viability, the supply chain and future prices. It should also be noted that ADF is of the firm opinion that the ACCC must take a longer term view of market issues than it currently does on all issues and in all its investigations.

It must not only look at the impact of issues on the current market but examine potential future impacts – this is particularly the case for misuse of market power issues. The former Section 49 of the Competition and Consumer Act included an ‘effects’ test – does the conduct in question have the effect or the likely effect of bringing about a substantial lessening of competition? The key term here is substantial lessening of competition - how can any reasonable person or organisation complain about this?

It is in line with other current competition in Australia and around the world. The Government must not let self-interested large companies with excessive market share dictate to consumers, farmers and the Government.

ADF strongly supports the Harper Review’s recommendations for any updated competition and consumer law to include an Effects Test and is advocating for certainty that the legal process is able to provide integrity and transparency regarding the impact of retailer actions on suppliers. ADF is hopeful that this will aid in preventing potentially damaging situations such as retailer predatory pricing in future.

Addressing the misuse of retailer market power is crucial in determining the Australian dairy industry’s future profitability and sustainability.

ADF supports the recommendations to increase the focus on dealing with the current imbalance of major retailer market power. Farmers need every opportunity to improve their negotiating power for profitability and returns at the farm-gate to be achieved.

ADF looks forward to working with both sides of Parliament, to ensure the unequal distribution of market power is addressed for the benefit of the entire food and grocery sector.  

 

Boost for dairy competitiveness welcomed

Jul 18, 2015

The much-anticipated Agricultural Competitiveness White Paper released on Saturday 4 July on Australian Dairy Farmers (ADF) National Councillor, Roma Britnell’s dairy farm in Victoria has delivered key initiatives which mark a positive step toward delivering higher productivity and profitability for Australian dairy.

Key benefits for dairy farmers which have been championed by ADF as part of the Australian Dairy Industry Council (ADIC) include increased funding for Agricultural Counsellors abroad to address technical barriers to trade in overseas markets; improved flexibility of Farm Management Deposits and investment in establishing agricultural expertise in the provision of an Agricultural Commissioner for the Australian Competition and Consumer Commission (ACCC).

“We are pleased to see that key points of the ADIC’s recommendations to the Green Paper have been taken on board,” ADIC Chair, Noel Campbell said.

“In particular, the provision of $11.4 million over four years toward boosting ACCC engagement with agriculture, including an ACCC Agriculture Commissioner, will aid in fostering a stronger business environment throughout the supply chain.”

The ADIC submissions to the issues and green papers covered all aspects of agricultural policy with a particular focus on the following key areas:

  • Continued support for research, development and extension projects;
  • Overseas trade market access;
  • Strengthening competition laws;
  • Improving skilled labour availability.

The Government’s enhanced commitment to research, development and extension projects with a focus on innovation and risk management was also welcomed by the ADIC. The commitment of $200 million to improve biosecurity surveillance and analysis nationally will also play an essential role in creating a more durable, profitable and competitive dairy industry.

Additionally, the Government’s confirmation for water efficiency projects combined with improving existing water infrastructure and developing new infrastructure is positive. Increased support for these initiatives was a key recommendation in the ADIC’s submission to the Green Paper.

Mr Campbell said that the ADIC is committed to working with Government to see swift implementation of the initiatives delivered in the White Paper.

“The White Paper points us in the right direction in terms of where we want to go and as an industry we now look forward to working with Government to ensure that these initiatives translate into real outcomes for dairy.”

Click here to view the ADIC’s submission to the Agricultural Competitiveness Green Paper. 


President's Message - June 2015

Jun 15, 2015

 

Whether at the farm gate or in the board room, stopping to take stock, acknowledge success and identify areas for improvement is essential to ensuring any good business remains on track to deliver desired outcomes.

Now at the half way mark for 2015, Australian Dairy Farmers (ADF) is reflecting on the progress made thus far and the challenges yet to overcome, with the interests of dairy farmers and their profitability top of mind.

Volatility is a constant theme for dairy farmers and the past six months has been no different with all regions affected in some way by floods, drought and an ever fluctuating global milk price. But while there have been challenges there has also been important progress.

In March, we welcomed the Australian Government’s announcement to introduce legislation capping water buybacks in the Murray-Darling Basin Plan (MDBP) at 1500 gigalitres (GL). The 1500GL cap provides dairy farmers in the Murray-Darling Basin with much-needed certainty about future water availability to sustain their business.

ADF has also welcomed the relaxation of audit requirements for farmers in the southern-connected region of the Basin who participate the On-Farm Irrigation Efficiency Programme. This policy win will be explored later on the newsletter.

ADF’s lobbying on competition policy was instrumental in securing a positive step toward reforming Australia’s flawed legislation - the introduction of a Prescribed Code of Conduct. The Prescribed Code is not perfect, but it does address several key imbalances with regard to retailers’ power over suppliers. We welcome the commitment already made by retailer Woolworths by signing onto the Prescribed Code, and expect that in the days to come all the major retailers will follow suit.

ADF will continue to monitor the Codes’ effectiveness over the next three years with a view to seek the strengthening of regulations if necessary. We will also continue to advocate for an Ombudsman to help balance the market power of major retailers.

The above ‘short list’ skims the surface of the progress made so far this year, with many challenges, and triumphs, still ahead. At the forefront of our agenda is ensuring our industry retains the confidence and trust of consumers, customers and the broader public by addressing issues of concern such as unconventional gas mining and highlighting dairy farmers’ commitment to the health and wellbeing of their cattle.

The team at ADF remains committed to ensuring Australian dairy’s voice is heard through government policies that support our industry, and working with our industry bodies to ensure dairy’s good practices are known and understood across the broader community.

Noel Campbell
ADF President

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