Competition policy at a cross roads

Jan 25, 2016

January 26, 2016 marks five years since Coles’ supermarket dropped the price of its home brand milk to $1 per litre, igniting a price war with Woolworths that reduced the value of milk to an unsustainable level.

Australian Dairy Farmers (ADF) has continued calls for the Federal Cabinet to adopt stronger misuse of market power laws to foster a more competitive business environment.

ADF President, Simone Jolliffe said there have been important breakthroughs for competition policy since 2011.

“The introduction of the Food and Grocery Code, which included a large number of ADF’s recommendations, was a constructive first step toward fostering a more competitive business environment.

Further to this the Australian Government’s support for key recommendations from the Harper Review of Competition Policy is extremely positive,” Mrs Jolliffe said.

“ADF also welcomed the announcement in the Agricultural Competitiveness White Paper of $11.4 million over four years to boost the ACCC’s engagement with the agriculture sector including a new Agricultural Engagement Unit.”

However, Mrs Jolliffe said the industry would continue to advocate for improved transparency regarding the impact of retailer actions on suppliers. ADF also continues to advocate for the regulating bodies to have the power to prevent predatory pricing in future. 

“ADF also strongly supports the Harper Review’s recommendations for any updated competition and consumer law to include an effects test,” Mrs Jolliffe said.

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

Mrs Jolliffe encouraged consumers seeking to show their support for farmers to “buy branded”.

“The more branded milk we buy the more money stays in our dairy value chain. By keeping these dollars in the value chain dairy has the capacity to reinvest in industry research and innovation – which helps to strengthen our farmers, improving their efficiency and prospects of long term sustainability.

Buying branded means investing in choice for consumers on our supermarket shelves and in the future of our dairy farmers. This Australia Day – show your support by buying branded.

 

New target for routine calving induction in 2016

Jan 25, 2016

Key Points 

  • National policy to phase out calving induction 
  • Improved breeding programs to lift fertility and support farmers through the policy change
  • Learning from NZ approach
  • Targeted assistance and advice to be provided to farmers impacted

Caring for cows is always a key priority for Australian dairy farmers and our industry. The industry is dedicated to providing a high standard of care for our animals, and to changing practices when in the best interests of our livestock. 

In April 2015, following a series of meetings and consultation with farmers, vets and processors the dairy industry agreed to phase-out routine calving induction nationally.

Revised Policy

Australian Dairy Farmers (ADF), Dairy Australia, vets and processors have since been working on implementing the revised policy which is:

“ADF does not support routine calving induction and will work to phase it out through improved herd improvement practices, tools and technologies.”

Calving induction is already reducing in Australia and the dairy industry’s breeding programs such as InCalf and the improvement of fertility by genetic selection are making a difference.

A Steering Group, including dairy farmers, representatives from the Australian Cattle Veterinarians, Dairy Australia and the Australian Dairy Products Federation (ADPF), was established to progress the phase-out.

A data survey of veterinary practices performing inductions was undertaken in 2015. The results confirm estimates from previous farmer surveys that the number of cows induced is declining. It is estimated that in 2015 less than 1.5% of the national herd were induced (approximately 24,000 cows) however there is considerable variation between farms and regions.

The industry is now working to reduce even further the number of cows induced.

Target for 2016

After reviewing the 2015 induction data, ADFwill introduce a target for 2016 that routine calving induction will be limited to a maximum of 15% of cows within a herd unless a dispensation has been granted.

The 15% limit will apply unless a fertility management plan has been implemented or dispensation is granted for exceptional circumstances beyond a farmers control such as herd health issues, severe weather events (floods, fire), AB failure as well as other issues.

An 'Oversight and Engagement' Panel including representatives from ADF, the Australian Cattle Vets and ADPF has been formed. The panel, with support from Dairy Australia, will establish guidelines and consider requests for exemptions exceeding the 15% target set for 2016. Whilst there is no legal requirement on dairy farmers to achieve the 15% target the dairy industry is seeking to achieve industry-wide practice that is over and above the legal requirements and is confident farmers will adopt the recommended voluntary industry targets as the phase-out progresses.

Farmers will apply to the Oversight and Engagement Panel via their vet for special dispensation to carry out inductions in excess of the 15% limit for routine calving inductions.

The Steering Group will work with the Oversight and Engagement Panel to monitor progress and review the target each year in order to establish updated annual targets.

Industry Programs

Improving herd fertility is a fundamental requirement to reduce the need for routine calving induction and it also delivers many benefits for farm profitability and resilience. The industry is working closely with veterinarians and reproduction advisors to ensure advice and services are available to assist farmers with fertility management.

Industry programs such as InCalf, the Repro Right network and InCharge Workshops will be enhanced and the industry will provide targeted reproduction advice to those farmers most in need.

New Zealand

The New Zealand dairy industry has phased out routine calving induction over a period of time and has banned the practice as of 1 June 2015. The industry is liaising with counterparts in New Zealand to understand and learn from their approach; in particular the setting of annual limits with a dispensation process.

Late Calving Induction

A particular concern recognised by industry has been the use of late calving induction. ADF is aware that several veterinary practices no longer perform late calving inductions, as they provide no reproductive benefit. Late inductions (performed within 4-6 weeks of the due calving date) provide no overall reproductive benefit for the herd and should not be performed except for the welfare of the cow or her calf.

Early pregnancy testing is required by these practices to make sure late inductions are not occurring.

ADF will continue to consult with farmers, veterinarians, state organisations and other stakeholders to ensure that the timing, process and outcomes are right for animals and farmers.

*Routine calving induction is all non-therapeutic inductions

 

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.

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