Dairy Levy Review


Levy Poll Advisory Committee logo

Dairy Australia invests the service levy to provide services to benefit dairy farmers and protect their right to farm: research and innovation, supporting farm business management, responding to events such as drought or COVID-19, developing tools to adapt to the environment and address climate, supporting on-farm employment needs, marketing of dairy products and commitment to sustainability, policy research, industry insights, and delivering international market programs.

Find out more about Dairy Poll 2022

Visit the Dairy Poll to stay regularly informed on the levy poll options, initiatives for each levy poll option, and Dairy Australia’s investment areas.

How is the Dairy Service Levy allocated to services?

Approximately $55-60M is invested each year to deliver these services, which includes 50% from levy funds, 35% Government and 14% external contributions/grants, other 1%.

To maintain the services below, the industry has had to regularly dip into levy reserves, which are declining. Given current and predicted future levels of milk production, the Levy Poll Advisory Committee (LPAC) has considered the viability of this strategy if this level of innovation and services is to be maintained over the next five years.

Dairy Australia priorities

On-farm examples of industry services

Approx $

1. More resilient farm businesses

Increase farmer skills in business planning, risk management and finances – i.e. Our Farm Our Plan, DairyBase.

$7-8m (13%)

2. Attract and develop great people for dairy

Support farm businesses to attract, develop and retain good people – i.e. ESKI, People in Dairy website, DairyLearn, Dairy Passport

$6-7m (11%)

3. Strong community support for dairy

Promote dairy to consumers and the broader community – i.e. Dairy Matters campaign, schools program, health and nutrition policy support, sustainability.

$8-9m (14%)

4. Thrive in a changing environment

Provide resources to help manage climate and environmental challenges on-farm – i.e. Smarter Irrigation for Profit, C4 Milk, DairyHigh2.

$4-5m (7%)

5. Success in domestic and overseas markets

Build relationships and promote Australian dairy in overseas markets – i.e trade programs, Situation and Outlook.

$7-8m (12%)

6. Technology and data-enabled dairy farms

Research in genetics of pasture and cattle – i.e. DairyBio, DataGene, Dairy Feedbase, Forage Value Index

$18-19m (31%)

7. Innovative and responsive organisation

Driving an innovative organisation with talented people, focused on delivery value for farmers.

$7-8m (12%)

Total

$57-62m

*The above $ allocation is broadly representative of the 2020-21 year and includes delivery of services in the regions via the Regional Development Programs Murray Dairy, GippsDairy, WestVic Dairy, Western Dairy, DairyTas, DairySA, SubTropical Dairy and Dairy NSW (i.e., funded by the levy, through Dairy Australia).

The LPAC comprised 15 people – an independent chair, 12 dairy farmers (three of whom are from industry organisations) and two representatives from industry organisations. They met over six months (April to September) with two members resigning in September when the poll options were announced.

LPAC Recommends Poll Of Levy Payers - July 2021

Following input and engagement with dairy industry stakeholders, including farmers, the LPAC has recommended a poll be conducted of dairy levy payers to determine the future level of the Dairy Service Levy. Read the media release.

The LPAC arrived at its decision after considering submissions from Australian Dairy Farmers and Dairy Australia, as well as consultation from the Committee Members and direct input from dairy farmers via the Dairy Service Levy Feedback form.

  • Report of the Levy Poll Advisory Committee 7 July 2021

    PDF179.82 KB

LPAC Recommends Options for Levy Poll - September 2021

Following the recommendation to conduct a poll, LPAC was required to determine the voting options which will go on the ballot to be voted on in March 2022. The four (4) levy options to be presented in the levy poll are: 

  • no change to the levy (status quo)

  • an increase of 15%

  • an increase of 20% (recommended by LPAC)

  • an increase of 25%.

The levy option which LPAC recommends is an increase of 20%.

Refer to the media release for more information.

Why has LPAC recommended these options?

In making its decision, LPAC took into consideration many factors including that there has been no change to the levy since 2012, CPI increases in that time, financial projections of a continuing decline in reserves, future commitments required for the dairy industry to succeed, as well as analysis of the benefits of RD&E investment for dairy farmers. LPAC took into account this evidence and data as well as many views on the dairy service levy from industry stakeholders and farmers.

After detailed consideration of these factors and farmer feedback, LPAC determined that a levy increase of 20% is in the best long term interests of the dairy industry.

LPAC agreed that while an increase to the levy is recommended, farmers will make the final choice, and therefore an option of no increase has been included on the ballot paper. For more, read LPAC’s report on the levy poll voting options. 

View a video of Ron Storey, LPAC Independent Chair, to find out more about LPAC’s decision:

What Happens Next?

There are significant pre-poll activities to be undertaken by Dairy Australia over the October 2021 to March 2022 period such as verifying levy payer voting entitlements, preparing voting papers and an information pack.

There will be thorough communications to levy payers prior to the poll to ensure that farmers who are entitled to vote understand the options and how to vote.The poll is expected to be conducted in March 2022 with an outcome by April 2022.

Voting options announced by LPAC

September 2021

Pre-poll communications on levy options to dairy farmers

Oct 21 - Mar 22

Voting material and information pack provided to levy payers

Early 2022

Voting for levy poll opens

24 February 2022

Voting for levy poll closes 

31 March 2022

Outcome of the poll announced

April 2022

LPAC Members

Chair - Ron Storey

Ron Storey is an experienced agribusiness executive and Non-Executive Director. He is Chairman of the Australian Export Grains Innovation Centre and a former Chairman of Pulse Australia Limited. During his executive career Mr Storey was Head of NZX Agribusiness Australia, Managing Director of Australian Crop Forecasters and General Manager Marketing, AWB Ltd.

The following dairy farmer and industry body representatives have been appointed to the Levy Poll Advisory Committee:

  • Dairy farmer representatives on LPAC

     

    • Heath Cook, NSW (resigned Sept 2021)

    • Katrina Gofton, Tasmania

    • Brendan Rea, South-West Victoria

    • Matthew Trace, Queensland (resigned Sept 2021)

    • Andrew Aldridge, Tasmania

    • Karrinjeet Singh-Mahil, South-West Victoria

    • Andrew Cavill, South Australia 

    • Daryl Hoey, Gippsland, Victoria

    • Peter Evans, Western Australia

     

  • Industry body representatives on LPAC

    • Tania Luckin, Dairy Australia Director and dairy farmer from South-West Victoria
    • Roseanne Healy, Dairy Australia Director 
    • Rick Gladigau, Australian Dairy Farmers Director and dairy farmer from South Australia
    • Victoria Taylor, Australian Dairy Farmers Director
    • Peter Mulcahy, Australian Dairy Products Federation representative. KyValley Dairy Director and dairy farmer from Northern Victoria

LPAC Terms of Reference

The Levy Poll Advisory Committee’s Terms of Reference summarises the role of the committee and requirements of committee members.

Media Releases and Communications

  • LPAC Levy Poll options report September 2021

    PDF847.63 KB
  • Media release Levy Poll Announcement September 2021

    PDF222.15 KB
  • Media release LPAC Levy Poll Announcement 15 July 2021

    PDF161.37 KB
  • Report of the Levy Poll Advisory Committee 7 July 2021

    PDF179.82 KB
  • Communication LPAC Makes Progress 1 June 2021

    PDF245.71 KB
  • Communication LPAC Formation 20 April 2021

    PDF120.38 KB
  • Media release LPAC Formation 20 April 2021

    PDF119.65 KB
  • Media release LPAC Seeks Farmer Nominations 11 March 2021

    PDF121.94 KB

Frequently asked questions

About the Levy Poll Advisory Committee (LPAC)

  • What is the Levy Poll Advisory Committee?

    The Levy Poll Advisory Committee (LPAC) was convened to provide a recommendation on whether the levy should change and subsequently, whether a levy poll vote should occur. Having called for a poll, LPAC then needed to determine the levy options for the poll and its recommended option.

  • Who is on the LPAC?

    The LPAC comprises of a majority of levy payers who are reflective of levy payers nationally.

    • An independent Chair

    • Levy payers, based on direct nominations

    • Representatives from industry organisations, as set out in legislation.

  • How was the LPAC appointed?

    • An independent Chair was considered by a selection panel who recommended the appointment to the Chair of Dairy Australia and President of Australian Dairy Farmers.

    • The Chair invited nominations for other representatives. All dairy levy payers were able to nominate for the committee and applications were assessed by an independent selection panel who ensured an appropriate representation of dairy levy payers as required by the legislation.

  • Do LPAC representatives receive remuneration?

    LPAC representatives are paid a sitting fee of $330/day for time spent on LPAC matters and any travel costs (fares, meals, accommodation) are covered.

  • What is LPAC’s primary task?

    LPAC's primary task is to "review and decide what level of funding is required to underpin the long-term research, development and extension strategy for the dairy industry" (from the Terms of Reference.)

  • Why are Dairy Australia and other industry representatives included on the LPAC?

    The membership requirements for the Levy Poll Advisory Committee are set out in the legislation that prescribes the levy poll process, Dairy Produce (Dairy Service Levy Poll) Instrument 2016. That Instrument specifies inclusion of representatives from Dairy Australia (DA), Australian Dairy Farmers Limited (ADF), the Australian Dairy Products Federation (ADPF), plus direct dairy farmer representatives who form a majority of LPAC.

  • How does levy poll voting work?

    The levy poll has four options which means that a preferential voting system will be used to determine which levy option is preferred by eligible voters. Preferential voting requires voters to place the numbers 1 to 4 against their preferences, with 1 being their first preference.

    Members will be able to vote via post or electronically. Details will be outlined in the voter information pack which will be sent to all levy payers at least five weeks prior to the poll.

Levy Poll Process

  • Do LPAC representatives receive remuneration?

    LPAC representatives are paid a sitting fee of $330/day for time spent on LPAC matters and any travel costs (fares, meals, accommodation) are covered.

  • Why is a levy poll not mandatory?

    In late 2015, all dairy levy payers were asked to vote in a poll based on the recommendations of the Dairy Levy Poll Process Review undertaken earlier that year. Levy payers supported the removal of the compulsory requirement for Dairy Australia to convene a levy poll at least every five years. Instead, a LPAC would be convened to determine if a change to the levy should be recommended.

    The aim was to ensure that the costs associated with a levy poll are not incurred if there is no change to the levy. In early 2016, legislation passed the Federal Parliament to amend Section 9 of the Dairy Produce Act 1986 (the Act) and effect this change. The new legislation also provides an option for Group A members to petition for a change if they disagree with an LPAC recommendation not to conduct a levy poll.

  • What's the process in the lead up to a levy poll?

    Once a levy poll is triggered the levy poll must be conducted with the following key considerations:

    • Stakeholder consultation about the poll must be conducted with levy payers (the Consultation plan requires input from the Commonwealth Government and LPAC).

    • Levy payers will be provided with a range of information to assist them make a decision on the poll (information pack).

    An information pack including voting instructions and documentation around performance, and use of levy funds, is required to be approved by the Minister and sent to all levy payers at least five weeks prior to the poll.

  • How does levy poll voting work?

    The levy poll has four options which means that a preferential voting system will be used to determine which levy option is preferred by eligible voters. Preferential voting requires voters to place the numbers 1 to 4 against their preferences, with 1 being their first preference.

    Members will be able to vote via post or electronically. Details will be outlined in the voter information pack which will be sent to all levy payers at least five weeks prior to the poll.

  • Who is entitled to vote?

    All levy payers are able to vote (not just members of Dairy Australia). Voting entitlements will be advised to levy payers in advance of the dairy poll and will be based on the amount of levy paid. 
  • When will farmers be informed on how to vote?

    Levy payers will receive an information pack to explain how the vote will be conducted. There will be options for both postal and electronic voting. Full materials will be provided at the start of 2022. 

  • What are voting entitlements based on?

    • One vote for each whole dollar of dairy service levy (if any) that the entity paid to the Commonwealth before the cut-off day for the levy year. Provisions apply for trusts and deceased estates.

    • Dairy Australia may invite levy payers to provide additional information to assist in determination of voting entitlements.

    • Levy payers have an opportunity to have their voting entitlements reconsidered and if the levy payer remains dissatisfied, this can be escalated to an independent disputes panel (membership must exclude Dairy Australia employees, an eligible voter or their associate; or the returning officer).

  • How do levy payers know how many votes they get? 

    Dairy Australia will write to levy payers ahead of the Dairy Poll to advise of voting entitlements.  

  • What happens next? 

    There are significant pre-poll communications and engagement activities to be undertaken by Dairy Australia, such as outlining the investment areas for an increase in levy, verifying levy payer voting entitlements, preparing voting papers and information memorandum outlining the voting options in greater detail, and encouraging levy payers to vote.

LPAC's decision on voting options and related question

  • What did LPAC consider in its decision making?

    In making its decision LPAC took into consideration many factors including that there has been no change to the levy since 2012, CPI increases in that time, financial projections of a continuing decline in reserves, future commitments required for the dairy industry to succeed, as well as analyses of the benefits of the levy investment for dairy farmers. LPAC has taken into account these insights and data, as well as many views on the dairy service levy from industry stakeholders and farmers. For more read the LPAC's Options Report.

  • Why do the voting options not include options for decreases in the levy?

    Over a six-month period, LPAC reviewed "what level of funding is required to underpin the long-term research, development and extension strategy for the dairy industry" – its primary task. LPAC decided that an increase in the levy was required to meet that objective and was in the best long-term interest of the industry. LPAC acknowledges that farmers have a range of different views and therefore included a 'no change' option in the poll. LPAC considers 'no change' to be a vote for an effective decrease, because with no change to the levy over a fifteen-year period against a background of 30% increase in costs, there will be an impact on services provided.

  • What does a vote for status quo mean?

    A vote to maintain the status quo will mean that there will be no change in levy for the next five years, and the levy will have stayed the same for 15 years from 2012-2026. With CPI and cost of business increases of around 30% over that time, the buying power of the levy is reduced, and this would result in an impact on the services provided.

  • What does LPAC think of the petition being put forward by farmers to call for additional options to be included on the ballot paper?

    Farmers are entitled to express their views – and throughout this process LPAC has listened to many of these differing views. In LPAC's view, the best way for farmers to express their views is through voting in the March 2022 levy poll.

  • Will the petition actually change anything? Can the Minister override LPAC's determination?

    LPAC's options, recommendation and process have already been noted by the Minister in September 2021. The options determined by LPAC are in line with its Terms of Reference and as governed by legislation. Once farmers vote in March 2022, the results of the poll are communicated by Dairy Australia as a recommendation to the Minister. It is at that time that the Minister will decide whether to accept the recommendation and implement any change to the levy as voted on by dairy farmers.

Contact

Questions relating to the levy review process or poll process should be sent to the email address listed below.

Enquiries

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