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_BY BOYD CHAMPNESS_ DAIRY farmers in Western Australia (WA) could potentially hold the entire dairy deregulation process to ransom after demanding additional compensation from their State

Government on top of the A$1.7 billion (668m) national restructuring package. The package – which will be distributed to all dairy farmers in an effort to help ease the pain of deregulation

– goes before Parliament this week, but uncertainty remains about whether it will be approved because of resistance from several states. According to a report in _The Weekly Times_, WA

farmers are understood to be threatening legal action if the WA Government goes ahead with deregulation without meeting their demands. This is despite the fact that WA farmers stand to

receive the largest cut of the national restructuring package. All states must agree to deregulate their dairy industries before the Federal Government implements the package. The Federal

Government has warned that it will dispense with the current Dairy Market Support Scheme on 1 July and if the states have not come to the party by then may retract its A$1.7 billion offer.

Victorian dairy farmers, who p;roduce 63% of the nations milk, put extraordinary pressure on their interstate counterparts when they voted for deregulation at the end of last year. Although

reluctant to follow suit, farmers in most states now believe deregulation is inevitable following Victorias move. South Australia and Tasmania have already signed off on deregulation, the

Queensland industry is understood to be in favour, but the Queensland Government is still undecided, while a poll of dairy farmers in New South Wales recently voted 65% in favour of the

move. According to _The Weekly Times_, both the Labor Party and the Australian Democrats have flagged they will want to take some time to assess the legislation to make sure it provides

adequate assistance. Nevertheless, the 1 July deadline is tight and could cause quite a bit of consternation within the industry if the states dont support deregulation and the package in

time.