Disclaimer: This publication is provided in good faith and as a guide only. It may be of assistance to you, but the VFF/UDV does not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or consequence that may arise from you relying on any information in this publication.

United Dairyfarmers of VictoriaFarrer House 24-28 Collins Street Melbourne 3000 | ABN 67 079 980 304Ph. 1300 882 833 | Fax. 03 9207 5500 | E-mail. vff@vff.org.au | www.vff.org.au

Spring is the season of regeneration and that is certainly how the past month has shaped up.

On the farm the cold winter has been replaced by plenty of moisture and the warmth required to get the pastures growing. That has provided the optimism that the much depleted fodder reserves may have the opportunity to be renewed.

Politically spring brought us a new government. Whilst there were no surprises with that result, the election of Independents (Cathy McGowan at Indi and Clive Palmer in Fairfax) to traditionally conservative seats changes the dynamics of our representative structure. That will be further reinforced from next July when the new Senate includes the Motoring Enthusiasts Party.

Our new Federal Agricultural Minister is Barnaby Joyce. Barnaby is recognised as a passionate advocate for agriculture and the rural communities and is already well versed in the issues of importance for the dairy industry. It is anticipated that he will be a worthy advocate in the Abbott government’s discussions.

The new government has already focussed on the need for Free Trade Agreements through Asia. According to the ADIC the current arrangements disadvantage dairy export products to the tune of about $200m per year.

The tight economic circumstances facing the economy will make dairy industry advocacy challenging. In this environment it is critical that we prioritise those things of greatest importance to us.

2014 Victorian electionTo that end, the UDV is well advanced in developing the industry priorities that we will articulate in the lead up to the 2014 Victorian election. The challenge is to put in some order to important issues like;• government spending on research,

development, extension and education• government investment in infrastructure• systems and structures to attract new

investment to the industry• the challenge of competing interests.

A priority for the UDV will be to optimise existing government programs and spending priorities.

The UDV material will form part of a broader election strategy being developed within the VFF. The UDV intends to add a raft of dairy industry data into specific packages of information developed for each of the electorates where

dairy farming occurs so that our politicians and would-be politicians understand the value dairy provides our economy.

DA AGMThis time last year the UDV put a resolution to the DA AGM that was designed to improve the process for farmers who applied to be a member of the DA Board. That new process was used for the first time this year.

UDV also raised the need for a review of the DA constitution. The review has occurred with all levy payers having had the opportunity to contribute. UDV was very active through this process. We consulted widely through the industry in the development of our position. We look forward to viewing the recommendations from the Review Panel. It is our expectation that these will be dealt with at November’s DA AGM.

In Summary The new financial year has started well. Solid opening prices have been strengthened with announcements of step-ups across the board. Keeping the AUD at the lower levels is important to all of us.

The financial challenges remain significant but the improved outlook for our products does provide increasing comfort for most. We have been disappointed by the activity of one of our banks recently calling some loans to an end. Whilst it is accepted that banks are entitled to be making commercial decisions for their business, there is an established and regulated process that needs to be adhered to when dealing with financially stressed farming businesses.

UDV will continue our work in the milk pricing structure space. We will also continue to focus on improving the quality of financial benchmarking data available to farmers. Better decisions can be made with the benefit of better information.

Providing farmers with information on the impact trade issues are having on their business will be a priority for the UDV. Over the next month or so the UDV will be hosting dinners across the state involving representatives from the processing sector and the DA trade team. You are all encouraged to attend.

UDV is also hosting an information session involving the VFF staff and elected members

Spring Provides Needed Regeneration

Newsletter of the United Dairyfarmers of Victoria

SPRING | October 2013

Inside this issueUnconventional Gas in Gippsland

Planning key to reduce impact of weather extremes this summer

Free Trade Agreements and the Victorian Dairy Industry

Australian Dairy Farmers CEO nominated for 2013 Telstra Victorian Business Women’s Awards

457 Immigration Developments

involved with the Coal Seam Gas issue and milk processor representatives.

I am looking forward to the next Hotline where we expect to be making an announcement about an employment advice service for members.

Kerry Callow is President of the UDV and a dairy farmer from Macarthur.

Australian Dairy Farmers CEO nominated for 2013 Telstra Victorian Business Women’s AwardsThe 2013 Telstra Victorian Business Women’s Awards has announced Australian Dairy Farmers CEO, Ms Natalie Collard, as a finalist in its Community and Government Award category.

The awards recognise women that are agenda-setters, leaders in their fields and an inspiration to other women, celebrating the valuable contribution women make to Australia business.

President of Australian Dairy Farmers (ADF), Noel Campbell, said the nomination was deserved recognition of Ms Collard’s work in the public and not-for-profit sectors.

As President of the ADF, I am delighted to learn of Natalie’s nomination for this year’s Telstra Victorian Business Women’s Awards,” Mr Campbell said.

“Natalie is no stranger to roles of high impact and national importance.

“As an official with the Defence Department and the Department of Foreign Affairs and Trade, she managed an emergency post-September 11 arms control meeting in Paris.

“She has also addressed the United Nations (UN) in Geneva on the topic of Biological Weapons.

“Moved by the plight of drought affected farmers, in 2000 Natalie became the Manager of Rural Affairs for the National Farmers Federation (NFF).

“Formerly a Director of Agsafe and now CEO of ADF, Natalie has demonstrated an abiding commitment to farming communities across Australia.

“In particular, she continues to apply her considerable skills to help secure a sustainable future for dairy farmers.

“Natalie is a worthy nominee for the Community and Government Award, and on behalf of the ADF I wish her every success in this endeavour.”

The 2013 Telstra Victorian Business Women’s Awards winners will be announced at a Gala Dinner at Crown Palladium on Tuesday 15 October 2013.

457 Immigration DevelopmentsDairy Australia has developed a labour agreement application intended to address difficulties accessing overseas labour to fill chronic skilled labour shortages on farms. The first step involved establishing a pilot group of farms, which will then help pave the way to an industry-wide template labour agreement with the Minister.

DA is undertaking this initiative in response to growing frustration among farmers seeking overseas workers through 457 Visas, or backpackers on working holiday visas. The 6-month limit on employment for the latter is disruptive for the business, while the former is proving time-consuming, frustrating and inadequate. Compounding the issue is that many farmers do not want a university-qualified farm manager, but rather are seeking skilled senior farm hands responsible for many daily operational tasks including milking cows, detecting/treating animal health issues and animal husbandry. These skills are currently not recognized in the ANZ Standard Certification of Occupation (ANZSCO) list.

Labour agreements may offer a solution, as they may allow recruitment of workers with the equivalent of our NCDEA certificates II, III, and IV. Labour agreements are generally effective for two to three years, and allow for temporary and permanent visas to be granted. DA is undertaking this initiative because it will benefit the industry as a whole, and few farmers have the time or resources to attempt an application on their own.

If you would like more information please contact the UDV or Claire Miller, Manager Policy Strategy on cmiller@dairyaustralia.com.au, or call Claire on 03 9694 3739 or mobile 0409 509 677.

Employment AdviceAll UDV/VFF members are entitled to two free phone calls to the VFF Industrial Relations Service to discuss wage rates, entitlement calculations, award interpretation, employment conditions, WorkCover and superannuation.

To contact the Industrial Relations department Phone 1300 442 481.

Understanding Milk Pricing Structure – YDDP Event in Camperdown, September 2013

Unconventional Gas in GippslandControversy about exploration for unconventional gas – including coal seam gas and shale gas – in Gippsland continues. A number of farmers, both members and non-members, have contacted the VFF with concerns about unconventional gas. These farmers have been unsure or confused about the VFF’s policy on mining and coal seam gas.

The VFF’s policy on mining and gas has not changed. It is focussed on strengthening and protecting landholders’ rights and ensuring there are no permanent adverse off-site impacts from mining and gas developments. Our strong view is that farmers should have the right to determine what happens on their farm,

which is why we have called for farmers to have the right of veto.

Given the continued concerns about unconventional gas being expressed by farmers in Gippsland, the VFF is establishing a Gippsland Mining and Gas Taskforce. We are currently calling for nominations from any VFF members in the Gippsland region. The purpose of the Taskforce will be to:• Provide advice and feedback to the

VFF Land Management Committee on mining and gas issues in Gippsland.

• Complement the activities of the VFF Land Management Committee in relation to mining.

• Help inform further development of the VFF’s mining policy, and additional resources for landholders.

• Assist farmers with understanding their rights under mining and gas legislation.

• Help facilitate community consultation on mining activities.

• Provide a local liaison with mining companies and industry regulators.

Information on the task force is available from the UDV office. The UDV will be hosting a CSG session for milk processors and the VFF. The session is designed to update the processing sector on what course of action the UDV/VFF are undertaking.

Being prepared for a weather crisis makes good business sense.

Now is a great time to think about how an emergency event such as a torrential downpour, fire or prolonged heatwave could cost your business in lost production, bought-in feed, clean up and repairs.

Assessing your risks is important and jotting down an inventory of assets will help you establish your insurance priorities.

If you are vulnerable to extreme weather events, how will you clear roads or feed out in difficult conditions? Do you have back-up generators for pumps or heavy equipment? Some extra stored feed is very good insurance, but how much do you have?

Consulting your family, staff and stakeholders about your response to emergencies means everyone can be on the same page, ensuring the correct actions can be taken in an emergency.

Preparing the season feed plan, monitoring the weather, keeping track of feed supply and subscribing to weather warnings might be key parts of your planning.

A good way to prepare for an adverse weather event is to identify the trigger points and map out the actions you and your staff will take to manage conditions. For storms, for example, the trigger may be when winds reach a particular strength or direction.

Finally, think about writing down a list of all the key contacts and organisations you may need to call and make sure family and staff know where it is/have a copy.

Planning key to reduce impact of weather extremes this summer

FactboxFor more information go to http://www.thepeopleindairy.org.au/farm-policies-systems/preparing-for-emergencies.htm

Dairy Australia’s extreme weather pages include a dairy farm emergency preparedness check list http://www.dairyaustralia.com.au/Animals-feed-and-environment/Environment/Extreme-weather and a ‘Prepare your farm for fire’ toolkit www.dairyaustralia.com.au/bushfire

Last year Australian dairy farmers paid more than $200M in tariffs to overseas governments.

Free Trade Agreements (FTA) provide significant market opportunities for Australian producers, especially for the export driven Victorian dairy industry.

FTAs have the ability to deliver significant advantages for the countries involved, increasing their advantage against other competitors. For example, in recent years the New Zealand-China Free Trade Agreement has seen New Zealand overtake Australia as the country’s number one exporter.

New Zealand dominates dairy imports into China, supplying 98% of whole milk powder, 67% of skim milk powder and 44% of cheese in 2012. Their lower costs of production complimenting the preferential free trade agreement.

The New Zealand – China FTA, which came into effect in 2008, eliminates tariffs on all dairy products by 2019. Reduced tariffs for New Zealand dairy exports are having a significant impact on the Australia dairy industry, heavily reducing Australian terms of trade. Currently Australian milk entering the Chinese market is tariffed at 15% compared at 6% on New Zealand milk. By 2017 no tariffs apply to New Zealand milk.

Notably to protect the emerging dairy industry in China, the FTA caps preferential tariffs at 115,000 tonnes of imported dairy. While this figure is small compared to total Chinese dairy imports of over one million tonnes, Chinese authorities do not have to revert to the full tariff rate when the initial 115,000t limit is surpassed.

And despite surpassing the tariff ceiling in January of the 2013 calendar year, New Zealand is still dominating dairy imports into the country.

Australia commenced free trade agreement negotiations with China in 2005, however given non-agricultural hurdles, it

Free Trade Agreements and the Victorian Dairy Industry

appears unlikely that a final resolution will be achieved soon.

While the New Zealand dairy industry continues to receive preferential free trade arrangements with China, New Zealand will continue to maintain its commercial advantage over Australia.

In 2012 Australia signed the Malaysia Australia Free Trade Agreement (MAFTA), which came into effect on 1 January 2013. Further to the existing ASEAN – AANZFTA between many Southeast Asian nations, Australia and New Zealand, the MAFTA eliminates tariffs earlier and on a wider range of goods.

Victoria currently exports about 13,621 tonnes of dairy to Malaysia, which is about 12 per cent of Malaysia's total amount of imported dairy. Malaysia's growth rate for dairy products is in excess of what the country can supply domestically, providing an opportunity for Victoria to fill that gap with quality produce.

The Agreement also addresses non-tariff barriers to trade and significantly, a liberalised licensing arrangement for liquid milk exporters. This means dairy processors could potentially send branded whole milk to be placed straight on the shelves in Malaysia, instead of sending milk to be re-packaged.

Australia is currently engaged in nine FTA negotiations as well as another nine bilateral and regional FTA negotiations. Australia’s FTA negotiations with South Korea have stalled, in part due to a lack of agreement on investor state dispute settlement (ISDS) provisions, while longstanding negotiations with Japan, China and the Gulf Cooperative Council (GCC) are also yet to be completed for various reasons.

Without FTAs that support lower tariffs on dairy, Australia is at a comparative disadvantage, particularly where

Tim Leahy, UDV Region 2 Representative with Tyran Jones, UDV Vice President at the September UDV Policy Council meeting

Gordon Nicholas, UDV Region 4 Representative with Yaelle Caspi, UDV Project and Policy Officer at the September UDV Policy Council meeting

2014 UDV ConferenceDate to mark in your calendar

The 2014 UDV Conference will be held on Wednesday March 26th and Thursday March 27th at the MCG (AFL Members Dining Room).

For those farmers who enjoy football please note that the AFL opening game for the 2014 season will be held at the MCG on the evening of March 27th.

Dates for NotingThursday November 28th 2013ADF AGMClarion Suites Gateway, Melbourne from 8.30amAll Business Members of ADF are invited to attend.

Friday November 29th 2013Dairy Australia AGMFlemington RacecourseAGM to commence following the ADIC Industry Leaders Breakfast.

competitors have successful FTAs in place. As such, FTA negotiations formed a significant part of the ADIC election priorities for the recent federal election.

The UDV will be hosting Trade information sessions across the state in the coming weeks. They will be advertised locally and are open to all.