Increased transparency for ag land purchases

Jul 20, 2015

Foreign investment has historically been an important source of support for the Australian dairy sector. The dairy industry is strongly supportive of all investment, foreign and domestic, that helps the industry grow and prosper provided it adheres to the same regulations.

On 1 March 2015, the Federal Government announced a reduction to the screening threshold for agricultural land from AU$252 million to AU$15 million. The new threshold will include the cumulative value of agricultural land owned by the investor and the purposed purchase. An AU$55 million threshold for investments in agribusiness will be introduced 1 December 2015.

A step towards a register of foreign owned farmland is also underway, with the Australian Tax Office (ATO) collecting information on all foreign purchases, regardless of size from 1 July 2015. The ATO will also be auditing existing ownership of agricultural land by foreign investors to gain further insights into the investment landscape.

ADF President, Noel Campbell said the register would help increase transparency and give industry a better idea of what foreign investment really looks like in the dairy sector.

“The register is sound policy and will hopefully provide credible land ownership data to give us a comprehensive landscape of investment in agriculture across Australia,” Mr Campbell said.

ADF supports the government’s recent initiatives to improve the robustness of the investment landscape in Australia which recognise the important role of our global partners in helping the dairy industry to grow and strengthen.  


Report to strengthen farm profitability

Jul 19, 2015

A new report on the Australian dairy industry has identified efficient input use, strict cost control and sound management skills as the key areas of focus that can help all dairy farmers achieve better profits.

Commissioned by the Australian Dairy Industry Council (ADIC) and produced by Dairy Australia, the Sustainable Farm Profitability Report examines farm business profitability, pinpointing key drivers of successful dairying businesses and highlighting long-term strategies for success within farmers’ control.

Launching the report on Gippsland farmers’ Aubrey Pellet and Jaqui Morrison’s property on Friday July 3, ADIC Chair, Noel Campbell said that by benchmarking profitable and less profitable farms against one another the report would help identify areas for improvement on farm.

“Farmers may not be able to control the hike of electricity, fertiliser and fuel costs, which continue to squeeze margins,” Mr Campbell said.

“We can however control how well we use these inputs to control the costs which have a major influence on their bottom line.”

Macro drivers outside the farmer’s control, such as weather events, milk price volatility and government policy are put aside to provide a focus on the aspects of tactical efficiency, management capability and tactical flexibility decisions that farmers can make, to deal with risk and volatility.

Focusing on these elements under farmers’ control, the report highlights that every operation, big or small, has areas where it can improve to safeguard its profitability. No two of these farms are the same, which is why there is no “silver bullet approach” to profitable dairy farming.

Mr Campbell said that by using the resource document of tactical, strategic management guidance in conjunction with other resources, such as the new DairyBase tool from Dairy Australia, it was hoped that farm profitability could be lifted across the board.

Victorian Parliamentary Secretary for Treasury and Finance, the Hon. Daniel Mulino MP, officially representing Minister for Agriculture the Hon. Jaala Pulford at the event said that Government was keen to work with industry to ensure the future sustainability and profitability of the industry.

“We are committed to working with Australian Dairy Farmers, Dairy Australia and key dairy stakeholders to ensure this critical industry is focused on sustainable, profitable growth, and that farmers are supported to better understand their financial situation and to build financial flexibility to deal with volatility.”

To read the full Sustainable Farm Profitability Report click here.


 ADIC Chair, Noel Campbell with Vic Parliamentary Sec. For Finance and Treasury, Daniel Mulino, Federal Member for MacMillan, Russel Broadbent, Baw Baw Shire Council Member, David Balfour and Director of Gardiner Foundation, Bruce Kefford. Photo courtesy of Jeanette Severs.

PoM rent increase will damage dairy's competitiveness

Jun 17, 2015

The Australian Dairy Industry Council (ADIC) is extremely concerned about the Victorian Government proposal to increase rent of stevedoring facilities at the Port of Melbourne (PoM). The size of the reported increase will have a large and disproportionate impact on the dairy industry, including both dairy farmers and companies that export product through the port.

With around 85% of total dairy exports channelled through the PoM, dairy is the 5th largest user of the port. According to ADIC Chair, Noel Campbell the move could cripple dairy’s future competitiveness.

“The Australian dairy industry operates in an open international market, competing directly with products from other dairy producing countries,” Mr Campbell explained.

“Dairy manufacturers operating out of the PoM will be unable to simply add on the cost of the rent increase to their exported products without incurring negative effects in the global market place. This means the rent hike will be charged back to dairy farmers.”

Basing their estimating on the fact that each Twenty-foot Equivalent Container (TEU) will be handed a $100 rent increase per container, the ADIC said the impact on individual dairy farmers could be in excess of $1,000 per farm.

“The export market provides substantial and important markets for our products, one where there is clearly great demand for our high quality, safe products,” Mr Campbell said. “Exporting to these regions ensures the industry’s ongoing viability and growth.”

The ADIC has also expressed concern that the funds raised by the Government through the increased rent are not committed to improving port facilities, but will instead be directed to the cost of removing railway crossings in suburban Melbourne.

This will have repercussions for port fees in the future and provide no direct benefit to the dairy and other manufacturers that use the port. The impact on dairy and other commodity exports is further exacerbated by the proposed 50-year non-compete clause that will effectively mean the abandonment of the development of Hastings as an alternative deep-water port.

For further information on the ADIC’s policy and advocacy work in the markets, trade and value chain area click here


Budget offers mixed bag for dairy

Jun 16, 2015

The 2015 Federal Budget announced on 12 May, delivered modest gains for agriculture. With initiatives aimed at supporting rural and small businesses such as tax breaks for those with annual turnover under $2 million, social and community support services for rural Australians, and drought relief assistance, dairy came out slightly better off than the year before.

On 27 May, ADF welcomed the announcement from Federal Government that it would bring forward the introduction of accelerated depreciation of fodder, fencing and water assets to the night of the Federal Budget, as opposed to 1 July 2016. This decision will greatly benefit farmers who have been recently impacted by severe floods and drought. ADF acknowledges the considerable effort of the Hon. Barnaby Joyce, Minister for Agriculture, in making this happen.

Key gains for dairy in the 2015 budget:

•Tax write-offs for fences and new water storage
•$25 million for assistance for drought affected areas to reduce the impact of pest animals
•$20 million towards social and community support services for emotional impacts on farmers. And an extra $1.8 million for more counsellors.
•Cattle Farmers in the north will see $101.3 million over the next four years for improved road infrastructure
•$25 million to towards assisting Australian producers access the benefits of free trade agreements
•Tax burden for small business will be reduced to 1.5 per cent for businesses with annual turnover under $2 million
•A 5 per cent tax discount for smaller, unincorporated businesses
•An immediate tax deduction of all assets under $20,000 will allow small businesses to invest in new tools or machinery.
•$3.7 million allocated to implement recommendations from the review into the integrity of the 457 Visa Program.

The budget also included money for drought grants and loan schemes, however, this is the same money that was previously allocated but not spent.
ADF would have appreciated the budget also address the lack of Agricultural Counsellor postings to assist with reducing technical barriers to trade within key international dairy markets. We also would like to have seen further Investment in agriculture R, D&E, CRCs, infrastructure for rural regions and biosecurity.

There is still an opportunity to address these issues in the upcoming Agricultural Competitiveness White Paper. ADF will continue to advocate and work with government to help ensure the budget allocations are used to maximise its benefit for the dairy industry. 


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