Unilever Sustainable Sourcing Workshop- Overview of Australian Dairy Farm Risk Management SystemsHelen DornomDairy Australia27th August, 2012

DA’s role

• DA invests around $52-$58m annually on industry based RD&E and other service activities. We look across whole dairy value chain for areas where collective action or collaboration can be used.

• DA’s Investment is based on industry agreed issues /priorities

Farm Inputs Domestic and

Export Markets Milk Processing

Manufacturing Milk

Production

Import

2

Strategic Priorities

1. Improve farm margins and growth opportunities

2. Promote and protect dairy

3. Integrated response to climate change and natural resource management

4. Grow capability and skills

SP2 21%SP3 7%

SP4 15%

SP1 50%

Discussions today

– Overview of the systems to manage risk

– Discussion on Food Safety Systems and controls • domestically and internationally

- Ag and Vet Chemical Controls

- Animal Health and Welfare

- Environmental Controls/industry programs

Media

Education / AcademicsScientists

Health Professionals

Activist /interest groups

HealthOrganisations

PolicyMakers

Community

Government& regulators

FoodIndustry

Industry Service

providers

AgriculturalInterestgroups

Customers

Financial Institutions

DAIRY PRODUCT ENVIRONMENT

… how to select a manufacturer ?

Added values for strategic suppliers

3 basic criteria for all the suppliersProduct safety

Ethics

Chain quality

Product quality

Product availability

• Many components:– Food safety – Health and nutrition– NRM– Animal health and welfare– Employer skills and

employee attraction – Politicians and investor

communication– Product promotion– Investor confidence by

existing owners and new capital

Brand Dairy

ReplacementsLive Export

FodderMixed FarmCull Cows Bobby Calves

Reared for beef Vealers

Abattoirs

Milk

Farm Enterprise

Meat OtherAnimals

• Contamination of product

• Spoilage of product

• Pathogens

Food safety

Sources of on-farm risk

• Odours

• Water pollution

• Carbon

• Noise

Sources of on-farm risk

Environment

• Exotic diseases

• Endemic diseases

• Weeds

• Pests

Biosecurity

Sources of on-farm risk

Animal welfare

Sources of on-farm risk

• Husbandry practices

• Production diseases

• Land transport

• Bobby calves

Occupational Health & Safety

Sources of on-farm risk

• Skills

• Knowledge

• Equipment

• Zoonotic diseases

How do dairy farmers manage these risks?

• As part of their everyday activities

• Structured risk management programs– identification– analysis– evaluation– treatment– monitoring– review

• Performance measured against agreed standards

Verification of complianceSelf assessment

Environmental protection agencies

Local government officials

Dairy company field officers

State dairy food authorities

Private veterinarians

State government DPI’s

Animal welfare agencies

Vocational trainers

Dairy assurance activities

Regular Checking and Continuous Monitoring

Line Management Review

Third Party Audit

SCOPE AND FREQUENCY

Day to day - embedded in work place activities

Control Self Assessment – driven by risk profile and manager’s span of control

Internal and External auditing – sampling and verification, aimed at Policy and Standards compliance, and identifying system weaknesses

An established framework

SDPI’S

PRIVATE VETS

VOCATIONALTRAINERS

National Standards

Dairy Industry On-farm QA system

SELF ASSESSMENT

Sources of risk Verification

International Standards

ContaminationSpoilagePathogens

OdoursWater pollutionCarbonNoise

HusbandryProduction diseasesLand transport

Exotic diseasesEndemic diseasesWeeds & pests

Skills & knowledgeZoonotic diseases

BIOSECURITY

OH&S

ANIMAL WELFARE

FOOD SAFETY

ENVIRONMENT

DAIRY COMPANIES

LOCAL GOV’T

EPA’S

SDFA’S

A comprehensive system

SDPI’S

PRIVATE VETS

VOCATIONALTRAINERS

SELF ASSESSMENTMilking shedsMilking equipmentCleaningSterilisationWater qualityMilk chillingCooling towersIdentificationTraceabilityStockfeedsHerd healthVeterinary drugsAgricultural chemicalsPest controlEffluent managementHygienic calf rearingBobby calf managementCompetency and trainingFirst aidAccountabilityNon-conformances

Sources of risk Verification

ContaminationSpoilagePathogens

OdoursWater pollutionCarbonNoise

HusbandryProduction diseasesLand transport

Exotic diseasesEndemic diseasesWeeds & pests

Skills & knowledgeZoonotic diseases

BIOSECURITY

OH&S

ANIMAL WELFARE

FOOD SAFETY

ENVIRONMENT

DAIRY COMPANIES

LOCAL GOV’T

EPA’S

SDFA’S

What dairy QA covers

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A “Whole of Chain” Approach

• All parties responsible• Understanding needs and performance

– One-step forward– One-step back

• Consistent Minimum Mandatory Standards• Partnership Industry & Government

Context

Issues

Food Safety

Animal Welfare

Environment:Natural Resource ManagementStewardshipEnvironmental Degradation

Human:OH&S

CommunityExpectations

BusinessViability

Trade and other commercial/regulatory issues

Food Safety Program Mandatory (Dairy)

Eg.• Antibiotic residues• Milk quality• BJD 3 step plan• Animal welfare (Cattle code)• Environmental Issues• OH&S

ON FARM DAIRY QA PROGRAM

On Farm Dairy QA Program

Trade and other commercial elements

Food Safety Program (FSP)Mandatory

Dairy elements

Hygienic milkingMilking premises

Meat elementsAg + Vet + ChemicalsWater supply + qualityCleaning or Sanitizing

Micro biological ContaminationTraceability and Records

Personal competencyStock feeds

Dairy Food Safety Compliance Framework

DAFF

STATE DAIRY/FOOD AUTHORITY

AUTHORISED OFFICER APPROVED AUDITOR

•FSANZ Food Safety Standards• Export Control Orders

• State Legislation• Regulations/Codes of Practice

• National Auditor Competencies

• Contract - Deed of Undertaking

•Interpretive Guidelines•Standard Operating Procedures•Steering Committees•Working Groups

Harmonisation of Export & Domestic Standards

Dairy Farm Audits Number of Licensed Dairy Farms Number audited 2010-11

Total 6993 2915Queensland* 620 384NSW* 825 442Vic* 4613 1165Tas 445 445SA 306 306WA 184 173

*SRAs require audits at least every 24 months

In 2010-11LPA listed 190,801 program participants, with 5,819 inspections/audits (3%)Dairy had 42% on- farm FSP audits

Farm Audits

Verification of Dairy FSPs

• SRAs undertake desk reviews yearly

• SRAs undertake 5% verification audits of all dairy farms at least every 3 years

• In 2009/2010, 195 verification audits (2.5%)

• SRAs - national dairy farm auditor workshop held every 6 months - covers issues arising from audits, consistency of interpretation, implementation and reporting

Meat Milk Animals Other

Replacements Fodder

Live Export Mixed FarmCull Cows Bobby Calves

Reared for beef Vealers

Abattoirs

Farm Enterprise

InputsFoodLivestockWaterLabour

OutputsEffluentDead stockWaterNutrients

Context

IssuesCommunityExpectations

BusinessViability

FoodSafety

AnimalWelfare

Environment:- Natural resource

- Stewardship

- Environmental degradation

Human:- OH&S

ConstraintsMarket needs / wants (Domestic - Export)

- No. of standards + verification systems

Lack of recognition of common / shared

outcomes + effective existing controls- Lack of knowledge / evidence- Risk based proposition not well understood

Effectively managing on farm risks

Dairy Australia’s key focus areas include:

Dairy Moving Forward (Research, Development & Extension) (SP1)

Dairy Futures CRC (Animal and Plant performance) (SP1)

Feeding Systems (SP1)

Mastitis and Fertility (SP1)

Automatic Milking/Precision (Smart) Farming Systems (SP1)

People (NCDEA, People in Dairy, Workplace Planning, Leadership

Development) (SP4)

7

Dairy Australia’s key focus areas include:

Project Horizon 2020; value Chain models (NSW/Qld/WA) (SP1)

DIAL (including technology transfer) (SP2)

Health and Nutrition (Research and policy advice) (SP2)

Animal Health and Welfare (SP2)

Carbon tax and Water Access Issues (SP3)

Reputation Management/Sustainability (SP2)

Market Analysis (Situation & Outlook) /Market Access (SP1)

8

5

2

Identifying areas of leverage and risk

1 3

4

6

7

Build on strengths of

national and regional economic

contribution,

product quality, safety and nutrition?

Proactively reassure on fat, animal

welfare and environmental management

(especially in areas of water and

greenhouse gas emissions)?

Regional community

Health

Value creation

Integrity

Environmental stewardship