VICTORIA'S peak farm body is to slash its financial contribution to the National Farmers' Federation by 20 per cent.
It will also cut its payments to peak commodity councils by a similar proportion.
The ultimatum, delivered formally by the Victorian Farmers Federation late last month, is a body blow for the financially strapped NFF, which is currently looking for a viable new structure.
With the VFF putting about $1 million a year into the NFF and commodity groups, the move would strip $200,000 from NFF and commodity council coffers annually.
It could also spark similar moves from other state farm groups, especially in NSW and Queensland, which would compound the funding impact.
"We have written to the NFF and commodity councils informing them of our decision, which we foreshadowed six months ago," VFF president Simon Ramsay told The Weekly Times.
"The VFF is suffering severe financial challenges because of falling farmer numbers and the impact of drought - which has slashed our revenues by 30 per cent - and we just can't afford to keep paying that sort of money."
But Mr Ramsay stressed the VFF would not move until the current NFF restructuring process was finalised.
"We expect that process to produce a result that addresses the financial burden of national representation," he said. "It's not fair the three largest states shoulder most of it."
NFF president David Crombie acknowledged the VFF's move would create problems for NFF finances.
"If one member cuts its funding, equity would require that others do the same," he said. "And that is just not sustainable under current arrangements."
Mr Crombie said the restructuring process was focused on increasing membership - including getting West and South Australian farm groups to re-join - and more effective funding and co-ordination of national farm research and policy work.
"If we can achieve that, the financial load on current members and new entrants can be reduced," he said.
One likely change is the scrapping of the current funding yardstick - gross value of farm production - which Mr Crombie said was "grossly unfair".
Cattle Council of Australia president Bill Bray said VFF's move was disappointing, effectively reducing its CCA representation from four to three members.
"But it's the flow-on effect that worries me, the prospect of other state groups knocking on our door to follow suit," he said.
NSW Farmers' Association president Jock Laurie would not comment, other than to say the NFF review process should be allowed to run its course.
The NFF board, which considered the issue yesterday, has agreed on several reform principles but is yet to settle on a formal model.
