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Based on a six-month package, the relief includes special monthly drought distributions totalling $7.8 million (averaging 1.5 cents per litre) to be paid to DFMC farmer members from December 2006 to May 2007. In addition, DFMC will suspend its 0.5 cent per litre share levy, resulting in a total cash-flow benefit to its active members of 2 cents per litre (on average).
Distributions will be calculated based on butterfat and protein levels in milk supplied and will apply to milk provided from DFMC active members for the period 1 November 2006 to 30 April 2007.
Further benefits are available for farmer members from franking credits associated with the special drought distributions. Distribution payments will be 65 per cent franked in December 2006 and fully franked from January to May 2007.
Dairy Farmers Chairman Ian Langdon said while payment of the special drought distributions would provide some immediate relief for farmers, Dairy Farmers and DFMC recognised also the importance of putting in place a range of complementary assistance measures.
“Given that more than 50 per cent of farmer members’ farms fall outside Exceptional Circumstances (EC) declared regions, we will also be firmly focussed on working with government to ensure adequate support is provided to those that need it most.”
DFMC Chairman Ian Zandstra said the establishment of a joint Dairy Farmers-DFMC Drought Taskforce to monitor the drought’s ongoing impact on suppliers would ensure the relief package remained a major priority in coming months.
“We have already identified a number of different ways through which we can help ease the burden the drought has placed on our suppliers,” Mr Zandstra said.
“This includes providing our farmers with resources to assist in the completion of applications for government assistance as well as providing ongoing advice on the availability of stock, feed and dairy water. During such times, it’s important we work to ensure our suppliers have access to all the support that’s available from government and other parties.”
Other package components include mobilising Dairy Farmers’ corporate social responsibility program, Creating Greener Pastures, to provide assistance to dairy farming communities impacted by the drought via its community grants program.
DFMC Distribution Payment
In addition to the specific drought relief package, Mr Zandstra said DFMC had brought forward payment of its interim dividend by six months and increased the rate to 3.25 cents per share, which will be franked at 65 per cent.
The interim dividend will be payable to shareholders on 15 November 2006 and based on membership as at 31 October 2006. DFMC has also suspended its Dividend Reinvestment Plan, effective immediately.
