By Boyd Champness

THE Democrats – Australias third major political party, with the balance of power in the Upper House – are to seek amendments to the A$1.74 billion (670m) package proposed by the Federal Government to help dairy farmers cope with deregulation.

The Democrats argue that the adjustment package, put forward in the Federal Parliament, does not provide enough compensation to dairy farmers who face income losses when the industry is deregulation on 1 July.

Much to the Federal Governments chagrin, the Democrats indicated that they would seek to amend the legislation when it went before the Senate in March.

The Democrats rural spokesman, Senator John Woodley, told The Age newspaper that a senior agricultural official had recently estimated that about 4000 dairy farmers would be “vulnerable” after deregulation.

Mr Woodley told the newspaper that the Federal Government had failed to adopt two recommendations from last years Senate inquiry into deregulation.

One being adequate compensation for the loss of milk quotas and the other being more compensation for rural communities heavily dependent on the industry.

But the Federal Government argues that while 4000 of Australias 14,500 dairy farmers could find themselves in financial trouble, the number leaving the industry will be far less.

The Federal Government has warned the Democrats that any delays in passing the adjustment package could leave farmers with no entitlements when the Dairy Market Support Scheme sunsets on 1 July.

A spokesman for Agriculture Minister, Mr Warren Truss, told The Age the Government needed to begin assessing farmers entitlements by April if they were to receive their payments in July.

The package provides compensation payments to dairy farmers based on a 11/litre (4.2ppl) retail levy on drinking milk, and $30 million to help struggling farmers to leave the industry.

But uncertainty still hangs over the future of the package, with a small group of dairy farmers in Western Australia threatening legal action against their state government if it approves the plan without providing additional compensation.

The Federal Government has maintained all along that all states must agree to deregulation before the compensation package can be made available.