Parliament passes Government's $159M dairy assistance package

Mr Truss said the Federal Government has moved to address the concerns of dairy farmers and their communities most affected by industry deregulation, which were highlighted in a report on the industry by the Australian Bureau of Agricultural and Resource Economics (ABARE) in January.

The Government has further expanded the supplementary assistance package to provide more benefits to more farmers.

"With the passing of this legislation, the Government can now get on with the important task of implementing the package and ensuring farmers receive their payments as soon as possible,"

Mr Truss said. Mr Truss said the extra $159 million comes on top of the $1.78 billion already provided and clearly demonstrates the Federal Government's commitment to assisting the dairy industry adjust to, what was after all, a State-initiated deregulation of the dairy industry.

"The States, with the exception of the previous WA Coalition Government, have contributed nothing to farmers still struggling to come to grips with the removal of State-based milk price support arrangements. The Federal Government has stepped in to help, first with the comprehensive $1.78 billion Dairy Structural Adjustment Program and now with this extra $159 million in assistance."

The new package comprises:

• $119 million in basic market milk payments, and additional market milk payments, to dairy farmers who were heavily dependent on market milk production;
• $20 million to people who, because of extraordinary circumstances were excluded, or their entitlements were significantly lower than normal, under the Dairy Structural Adjustment Program; and
• a $20 million expansion of the Dairy Regional Assistance Program (Dairy RAP).

Mr Truss has directed the Dairy Adjustment Authority to process the new payments quickly.

The Minister said the new payments have been targeted to assist people who were the most severely affected by price movements following deregulation, and to people whose eligibility for Dairy Structural Adjustment Program payments was unintentionally limited by the scheme's eligibility criteria.

"Farmers involved in enterprises that formerly had a market milk dependency of more than 25 per cent will be eligible for a minimum enterprise entitlement, provided they were granted an entitlement under the Dairy Structural Adjustment Program and were still actively involved in a dairy enterprise on May 21," Mr Truss said.

"I have also asked the Dairy Adjustment Authority to examine cases where significant changes in farm-related circumstances, or a personal crisis, or an animal disease outbreak, were not properly taken into consideration under the Dairy Structural Adjustment Program eligibility criteria. These people may now be entitled to discretionary payments.

"Some discretionary payments will also be made to land lessors who can demonstrate that they are dependent for 50 per cent or more of their income on dairy farm leases and have suffered a loss of at least 20 per cent in that income. Around $20 million will be made available for discretionary payments."

Supplementary Market Milk Payments

There will be a minimum, or basic market milk payment entitlement of $10,000 for eligible farmers who had a market milk dependency of 25.1 per cent to 30 per cent and $15,000 from 30.1 per cent upward.

The entitlement would be shared among the various entities according to their entitlements under the original package. Those enterprises that were dependent on market milk returns for more than 35 per cent of the milk they delivered in 1998-99 would be eligible for the additional market milk payment or the minimum payment, whichever is the larger entitlement.

A sliding scale will be used to calculate the additional entitlements, where for every 0.10 per cent market milk dependency greater than 35 per cent in 1998-99, the enterprise will receive an additional payment of 0.12 cents a litre for those deliveries. At and above 45 per cent dependency a flat rate of 12 cents a litre would apply.

The supplementary market milk payments will therefore have a floor of $10,000 and a maximum payment cap of $60,000. An entity will be eligible for the larger of the basic market milk payment or the additional market milk payment. The total value of the supplementary market milk payments is up to $119 million.

For calculation purposes, the volume of total milk deliveries will be as determined by the Dairy Adjustment Authority for entitlements granted under the Dairy Structural Adjustment Program scheme.

This will avoid the need for new applications from dairy farmers and will enable early payments to be made. There will be an option to take entitlements as a lump sum or over eight years with Dairy Structural Adjustment Program payments.

Further inquiries should be directed to the Dairy Adjustment Authority on 1800 503 603 or www.daa.gov.au

Further information on Dairy RAP can be obtained by calling 1300 555 049.

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