Part 1: Chairman's Review

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Patrick Musgrave

The Dairy Adjustment Authority was established in April 2000 with the sole purpose of administering the Dairy Structural Adjustment Program, part of the dairy industry assistance package introduced by the Federal Government. Our task has been to make sure that dairy farmers had the opportunity to apply for a Dairy Structural Adjustment Program entitlement and to make sure that the right entitlements were paid to the right people into the right bank accounts.

Although the original Chairman and the government member had been appointed a little earlier, the other members commenced only in April 2000 and June 2000. There were
a few Authority staff in Canberra working with the government member. There were no staff in Melbourne, which was clearly where the operations centre would have to be located in order to work closely – as the Dairy Industry Adjustment Act 2000 specified – with the Australian Dairy Corporation.

These were the only arrangements in place for a program of which the original intention was that payments might start to farmers as soon as practicable after dairy industry deregulation on 1 July 2000. Consequently, there was a huge time pressure on the Authority and this had a major impact on our activities.

The first task was to enlist specialist service providers to work with us. The most important requirement of the Authority was the establishment of a comprehensive database which would accommodate the diversity of dairy industry structures across Australia. The Australian Dairy Corporation had already been requested by the Government to set up an appropriate database. The Corporation had also engaged a specialist computer software company to help design the system that would deal with the many types of calculations of entitlements which were foreseen. Some 30,000 applicants from around 14,000 dairy farm enterprises were expected to apply for Dairy Structural Adjustment Program payments.

Although the Corporation had already started on the project, the development and testing
of the computer system was complex and the first stage became available in late June. This presented a number of difficulties, not the least being that the system could not be
used to generate letters to dairy farmers, acknowledging receipt of their applications.

We had no alternative but to develop manual systems very quickly. This presented new difficulties, not only in managing the acknowledgment process outside the system, but also in ensuring that what was done manually was ultimately reconciled with the database of entitlements. Because of the delays in contacting many farmers, we received many duplicate applications which in turn generated further administrative headaches in terms of changes to the computer system to deal with such duplicates.

The impact on the Authority of the staged development and delivery of the computer system was enormous and the effects continued throughout the further processing stages.

Communications and registry services were provided by external agencies. To ensure accuracy and consistency with the relevant legislation, valuable services were provided
by leading legal and audit firms.

The result of all this effort was that, as forecast in the original application and information booklet issued in May, payments commenced to farmers in October and those with straightforward claims received their first payment in the last quarter of the year.

As at the end of December around 25,000 dairy farmers had been notified of their entitlements and more than 15,000 had begun receiving payments. The process of dealing with the remainder was slow because of the complexities of the ownership structures in the applications or complications arising from deceased estates or legal issues.

By the end of March more than 30,000 farmers had been notified and as at 30 June only 66 farmers had not yet been issued with a notice of entitlement. The total value of entitlements at that date amounted to just over $1.6 billion.

Dairy producers were able to appeal their decision through a request for internal review,
in the first instance, and further by appealing to the Administrative Appeals Tribunal.
The Authority has been encouraged by the low rate of appeals and attributes this low
rate to the stringent procedures employed in the decision-making process.

All farmers’ entitlements have been recorded in units on a register which will be effective until the final payments are administered after eight years. This register records all transactions in relation to units.

The task of making this all happen in such a short space of time has been truly herculean.
It would not have happened without the efforts of dedicated and focussed Authority members and, more importantly, talented, enthusiastic and resourceful management and staff. It has been a privilege to have been Chair of the Dairy Adjustment Authority during the delivery of the Dairy Structural Adjustment Program.

The Authority benefited greatly from valuable advice from the Australian Dairy Industry Council and the State dairy farmer organisations, and appreciates the cooperation from the dairy processors throughout the year.

I would also like to express our appreciation of the contributions of all the service providers, especially the Australian Dairy Corporation.

The experience we have all gained now puts us in good stead to achieve successful delivery of our new task, the supplementary dairy assistance program.

Patrick Musgrave
Chair

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