Radical change is needed to help the dairy industry hit reset after a decade of trauma, according to the head of the team that's put together a proposal to radically overhaul dairy industry structures.
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LOOK AHEAD: The Australian dairy industry needs transformative change, argues the architect of a proposed new structure.

The Australian Dairy Plan Joint Transition Team on Wednesday released a plan to form a new integrated national dairy organisation.

JTT chair Shirley Harlock said the proposal was transformative.

“I’m not sure if that’s what they expected but that’s what they asked for,” she said.

“They didn’t want tinkering – they didn’t want a little bit of everything we already have.”

Mrs Harlock said the dairy industry was hugely different to when deregulation occurred 20 years ago.

“The last 10 years have been really traumatic,” she said.

“They have put farms under pressure, companies under pressure, the whole industry under pressure and the margins are no longer there.

“At the end of the day, sometimes real reform or change has to occur to, I guess, reset the buttons.”

Mrs Harlock said she hoped the plan would help bring an end to the blame game.

“We can look back and blame the companies, we can blame the seasons,” she said.

“Whatever it is, it is what it is now, so what do we need to go forward.”

Mrs Harlock pleaded with organisations and farmers responding to the proposal to not get bogged down in the details initially.

“At the briefing of state dairy farmer organisations, I absolutely implored them to don’t dive into the detail of the report,” she said.

“I think the question that needs to be asked is does the dairy industry want an integrated model as they recommended we develop or not.”

If they did want the model, the next stage was to start to shape and refine this structure to do what everybody wanted.

“The detail is the next stage – they’ve got to work at a high level,” she said.

Mrs Harlock said the current structure was no longer working and was not fit for purpose.

“Twenty years ago we had 10,000 farms, we are down to 5100; you can’t have what we had in the past,” she said.

“There has got to be some amalgamation, some streamlining.”

Mrs Harlock said on the vexed question of whether the federal government would match levy payments if the new organisation had an advocacy role, the timing was good.

The JTT proposal had used the exact definition delineating between advocacy and agri-political activity approved for the pork industry.

The definition did not prevent the organisation from lobbying governments on policy, it just meant it could not back a particular party’s policies or candidates.

The government was looking for change in research and development organisations across industries.

But it was vital dairy was smart and presented as a united industry in putting its case for change.

She admitted that bringing the processors into the new organisation was going to be hard.

“There is a lack of trust,” she said.

“But we are tied at the hip – whether we like it or not – they need milk, we need stainless steel.”

The relationship between farmers and processors, particularly with the Mandatory Code of Conduct now in place, was commercial.

But the discussions in next phase of the process in developing the new structure might see the development of a mechanism to deal with differences between processors and farmers on particular issues.

Mrs Harlock also admitted that the proposed new structure would not solve milk price.

“We had in the submissions people talking about milk price,” she said.

But the JTT wanted people to be clear that this would not directly deal with milk price.

The proposal stated that the JTT “believes that decisions about milk price are fundamentally a commercial matter between buyer and seller”.

Mrs Harlock said the JTT group had gelled well from the outset but had been rigorous in its approach.

“The debate meant sometimes we went round that table three times before there was consensus,” she said.

The moods of many dairy producers have been boosted by the first quarter performance of their dairy. With significantly higher milk check prices year-over-year, most dairies are making profitable margins according to Trent Dado, independent dairy nutrition and management consultant with GPS Consulting.

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