By Boyd Champness

THE Australian dairy industry last week moved one step closer to deregulation after the New South Wales Dairy Farmers Association (DFA) reluctantly voted to support the A$1.25 billion deregulation package.

Meeting in Sydney, New South Wales DFA delegates passed a carefully worded motion recognising that “despite all the attempts of NSW and other states, the Victorian industry will actively seek total removal of all regulation in their state and, further, will make continued regulation in other states unsustainable and national deregulation inevitable.”

“Accordingly, the conference believes that the proposed national transition adjustment scheme is the best option for members and that the DFA must continue to actively involve itself in its successful development and delivery.”

Victorian farmers the largest milk producing state are pushing for deregulation so that they can get access to the lucrative interstate fresh milk markets.

Milk going into the fresh milk markets consistently sells at a premium to that going into manufacturing.

With such a high concentration of dairy farmers in Victoria, the average dairy farmer in that state receives only about 17% of their total income from fresh milk markets, whereas NSW diary farmers receive up to 85% of their income from fresh milk markets.

Australian Dairy Farmers Federation president Pat Rowley applauded the decision by the NSW DFA to support the package.

“If the industry-agreed restructure package is to gain the support of the Federal and all state governments, then it is essential our politicians, bureaucrats, farmers and other industry sectors have the commercial pressures explained to them,” he told The Weekly Times.

But the largest hurdle the industry now faces is getting the Federal Government to agree to the A$1.25 billion adjustment package.

Federal Agriculture Minister Mark Vaile has ruled out making a decision on deregulation in the near future, adding that the industrys preferred option of having the Government underwrite the A$1.25 billion package was “a big ask”.

Farmers are expected to receive lower prices for their milk following deregulation and a one-off compensation package has been mooted to offset any such falls.