The industry-good organisation is not seeking to increase the levy, currently 3.6c/kgMS. But neither is it ruling out an increase in 2016 – after consulting with farmers.
DairyNZ’s farmer levy brings in $61 million annually. It goes into a wide range of activities, all designed to advance the cause of dairying and matching state contribution to R&D.
The money is spent in priority areas DairyNZ believes will have the biggest impact, such as feed, environment, labour productivity, farm business and animals. Those big decisions are ultimately made by the DairyNZ board of directors on recommendations by its senior managers.
DairyNZ’s role is to use farmers’ levy money to ensure it generates maximum returns for them. This includes securing funding from other sources where appropriate to further leverage farmers’ spending and investments.
Historically, industry-good activities were undertaken on behalf of dairy farmers by the New Zealand Dairy Board. When Fonterra was created and the board was disestablished in 2001, it was agreed these industry-good activities should continue for all dairy farmers. This resulted in the creation of two independent organisations, Dairy InSight and Dexcel, acting as funder and provider of industry good until the formation of DairyNZ in November 2007.
The milksolids levy was introduced in June 2003 following a dairy farmer vote in May 2002, the levy being collected under the terms of the Commodity Levies Act 1990. Through this levy, farmers pay for much of the work done by DairyNZ.
DairyNZ’s R&D is seen by farmers as important; so too is its work in the advocacy and policy area on environmental issues, an area of rapid change. The funds also help attract government funding and support, and add weight to DairyNZ’s advocacy role.
DairyNZ wants a big positive turnout for its milksolids levy vote to give it more authority when it goes in to bat for dairy farmers on advocacy and policy issues like the environment.
In 2008 62% of eligible voters turned out and 75% voted to continue and increase the levy. This year DairyNZ is hoping for a bigger mandate. With its good track record, one would expect farmers to turn out in droves to vote yes.
