Sources of funds

Dairy Australia’s annual funding is a combination of levy, government and leveraged funds.

Dairy Service Levy

The Dairy Service Levy has provided Dairy Australia with average funding of $30.6 million per year since the company was formed in 2003.

The levy is calculated on milk production at the rate of 2.6075 cents per kilogram of fat and 6.3558 cents per kilogram of protein. These rates have remained unchanged since 1997.

The levy is currently about $0.0032 for every litre of milk sold at the farm gate. A farm is therefore paying about $3,200 per year for every million litres of milk produced, or just under 0.8 per cent of milk income at 40 cents a litre. Based on average-per-cow production this means the current levy per cow is about $15.80 per year.

Government and the Australian people

Since the inception of Dairy Australia, the Australian Government has contributed an average of $17 million per year towards dairy research and development through matching payments provided under the Act.

These funds are capped at 0.5 per cent of the gross value of milk production at the farm gate. Based on the voting options in Dairy Poll 2012, the Government’s matching payments will not be affected by a change in the Dairy Service Levy rate, unless the rate is zero, which would mean there is no mechanism for this payment to continue.

Royalties, licences and interest

Additional funds generated from royalties, licence fees and interest also contribute to Dairy Australia’s bottom line and offset any shortfall between levy funding, Australian Government matching payments, Reserves drawings and the Company’s annual investment in services.

Other funding sources

In addition to the Federal Government matching payments for eligible research and development, Dairy Australia also attracts funding from other dairy and agricultural bodies such as the Geoffrey Gardiner Dairy Foundation and State Departments of Primary Industries, to support new and on-going research and development. The value of this funding is approximately $2.4 million per annum.