DAIRY STRUCTURAL ADJUSTMENT FUND The Dairy Structural Adjustment Fund was established under schedule 2 to the Dairy Produce Act 1986 for the statutory purpose of making payments to dairy farmers and dairy communities under the Commonwealth’s Dairy Industry Adjustment Package and meeting the cost of administration of the Package. As the industry services body, Dairy Australia is Trustee of the Fund. The Package comprises four schemes to assist dairy farmers and communities in adjusting to the deregulation of the Australian dairy industry in July 2000. The schemes are administered by the Dairy Adjustment Authority, Centrelink and the Department of Transport and Regional Services. It is these agencies that determine the entitlements to be paid from the Fund. During the year, Dairy Australia’s risk management and internal audit processes continued to review relevant aspects of the management of the Fund. The Trustee’s Report and financial statements of the Fund for the financial year ended 30 June 2007 are available on Dairy Australia’s website. Information about the Fund’s financial statements is included at note 22 of the Company’s financial statements, in accordance with requirements of the funding deed. REPORTING AND ACCOUNTABILITY Throughout the year, Dairy Australia reported to its key stakeholders in a variety of ways including: seven editions of the Dairy Australian, four letters (entitlement vote, notice of meeting, Annual General Meeting (AGM) follow up) to Group A members, presentations to farmer conferences and meetings, an AGM, an Annual Report, and quarterly reports to the Australian Government. Seventy one media releases were produced and distributed to print and/or electronic media in 2006/07. Group B members provided representatives to four Reference Groups which worked with Dairy Australia staff in the areas of farm, trade, technical issues and marketing. Dairy Australia’s formal process of accountability includes the provision of an Annual Report to its members, the Australian Government, and the Australian Securities and Investments Commission. ANNUAL GENERAL MEETING Dairy Australia’s AGM will be held on Friday, 30 November 2007 at Flemington Racecourse, 400 Epsom Road, Flemington, Victoria. The Company’s auditor attends the AGM to answer questions on the conduct of the audit and the content of the audit report. INDUSTRY CONSULTATION Dairy Australia continues to consult with the industry it serves. It meets with the Australian Dairy Farmers Board, the Australian Dairy Products Federation, their executive teams, the Australian Dairy Industry Council and others representing industry as well as the various state dairy farmer organisations. Dairy Australia recognises and wholeheartedly supports the collaboration that underpins, and is the hallmark of, the Australian dairy industry. The Strategic Plan 2008-12 and the Annual Operating Plan 2007-08 were both reviewed by the Australian Dairy Farmers Ltd and the Australian Dairy Products Federation before being finalised and provided to the Australian Government. DAIRY SERVICE LEVY POLL 2007 Dairy farmers pay a Dairy Service Levy on milk produced by them. The amount of levy paid by a dairy farmer is calculated having regard to the fat and protein content of milk produced. Based on national average fat and protein content of milk, the levy equates to approximately 0.315 cents per litre of milk produced by a farm. For the average farm this represents an investment of about $3,150 in collective action. Under the Dairy Produce Act 1986, Dairy Australia, as industry services body, must make recommendations to the Minister for Agriculture, Fisheries and Forestry in relation to the amount of the levy by the times prescribed by regulations. Before making a recommendation, Dairy Australia must conduct a poll in accordance with the regulations. The recommendation to the Minister must then be in accordance with the results of the poll. The first Dairy Service Levy Poll was conducted by Dairy Australia in February-March 2007. In accordance with the regulations, the poll was conducted under the auspices of an independent returning officer, Mr Stuart Painter from Ernst & Young. Three levy rate options were put to voters in the poll. These were: o Zero; o The current rate; and o A 15 per cent increase on the current rate. Dairy Australia and industry recommended that voters vote for the current rate as first preference. In December 2006, voting entitlements (based on one vote per dollar of levy paid) were sent to farmers who had paid levy during 2005/06. Under the regulations, voters had a right to request review of their voting entitlement if they believed it to be incorrect. It was pleasing that only five voters requested review and all of these cases were resolved without the voter needing to have recourse to the independent disputes panel established by Dairy Australia under the regulations. There were 9,540 ballot papers sent to eligible voters on 6 February 2007 ahead of the voting period from 9 February to 16 March 2007. More than 50 per cent of ballot papers were completed and returned by voters within the voting period.
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