An independent panel will review the administration of Australia’s dairy export quotas to the United States and the European Union.

Minister for Agriculture, Fisheries and Forestry, Tony Burke, has established the review to examine the effectiveness of the current arrangements and identify any areas for improvement.

“This is the first formal review of the administration of the quotas in these significant markets,” Mr Burke said.

“The Department of Agriculture, Fisheries and Forestry has administered the Australia-United States Free Trade Agreement dairy produce quotas since they began in 2005.

“The Department also manages quota access for some cheese products to the US and the EU under World Trade Organization (WTO) agreements.”

The review will look at the concepts underpinning quota controls, the quota allocation process and the ongoing administration of the quotas. It has no capacity to change export volumes; these are not set by Australia.

The review panel will be chaired by John McQueen, the former Chief Executive Officer of Australian Dairy Farmers Limited, supported by Dr Sandra Welsman and David Harris.

Dr Welsman is a public policy specialist who has conducted extensive work for government and the agricultural industry.

Mr Harris is an agricultural economist with considerable experience in providing strategic advice to government agencies, industry associations and private sector clients.

In 2006-07, the United States was Australia’s tenth largest dairy market, receiving 29,000 tonnes of product worth $125 million including cheese, whole milk powder and butter, all of which include quota access at zero tariffs.

The EU is also a major market for Australian dairy, importing 18,422 tonnes of product in 2006-07, including 10,700 tonnes of cheese.

“I encourage the dairy industry to be fully involved in the review and I have asked the panel to consult widely with stakeholders,” Mr Burke said.

The panel will report to Minister Burke by 30 May 2008.

Further information will be available at Dairy Quota Review or by contacting the review secretariat on (02) 6272-4672.

Terms of Reference – Australia’s dairy export quotas review

The Quota Review Panel should examine and report on:

• The appropriateness, effectiveness and efficiency of the current quota management arrangements.
• Identify areas where improvements to the quota management arrangements could be made, including in the areas of:
  • options for the management of quota categories;
  • where quotas are allocated, options for the allocation of quota entitlement;
  • minimum allocations, having regard to commercial practices;
  • provision for access to the quotas for new entrants;
  • quota transfer arrangements;
  • measures to deal with unused quota, including incentives and/or penalties if applicable, that will maximise the commercial use of Australia’s in-quota access to the relevant dairy market;
  • the legislative framework underpinning quota management;
  • cost recovery arrangements;
  • transitional arrangements from the current procedures to those recommended by the Quota Review Panel; and
  • any other area related to quota management that the Quota Review Panel considers is relevant.
• The implications of the provisions of the Australia-US Free Trade agreement on the administration of these dairy quotas in 2008 and subsequent years.