Parties looking the other way as dairy industry dies
NEITHER major political party is looking after the interests of dairy farmers.
That is the word from Harrisville dairy farmer Ross McInnes who says a mandatory code of conduct is still required between the major supermarkets and farmers for the dairy industry to prosper.
The Federal Government has agreed to appoint an independent mediator after the election and has vowed to move towards a mandatory code if voluntary code talks break down. Mr McInnes, also Queensland Dairyfarmers Organisation vice-president, has welcomed the news but said it was not nearly enough.
"The official Coalition policy didn't even mention it, so I don't think dairy farmers in Queensland would be happy to (endorse) either major party at the moment with their lack of commitment," he said.
"There are sections of each party that are just beholden to the major supermarkets. They talk about free markets and letting the market decide, but I think we have got market failure and they are sticking their heads in the sand.
"At the moment we have got 550 million litres of sales in Queensland and 450 million litres of production... and there are dairy farmers still going out and there is no signal from the market to say that prices are increasing."
Market economics would dictate that when there is a shortfall in supply of a product, the price should go up. But the major supermarkets selling milk for a dollar a litre and dairy farmers are stuck getting an average of 52 cents a litre. Mr McInnes has put that in some historical perspective.
"The last time that milk was a dollar a litre was in 1992 and we got about 47 cents (per litre).
"So in 21 years our price has gone from 47 to 52 cents. In that time our costs have doubled. And most of that five cent increase has been taken up with direct costs because we have to produce a higher quality milk now than we did 21 years ago."
Mr McInnes said a key stipulation of a mandatory code should be "a sustainable price back to farmers".
"That should be closer to 60 cents (per litre) than 50," he said.
"There should be guidelines in there to ensure farmers are paid a sustainable price. The brands have retrieved some market share but they discounted to do it.
"There is 2.3 billion litres of liquid milk sold in Australia each year, and for every cent it has gone down that is $23 million lost out of the milk supply chain."
The situation facing dairy farmers is serious and is why more than 300 people attended a recent forum on the industry in Esk.
Mr McInnes' family has been dairy farming at their Inverclyde property for 99 years here. His herd of 490 cows produce on average 26 litres of milk per cow, but the costs of production are high. Mr McInnes concedes the major supermarkets have "taken a hit and cut their margin".
"But it is the effect down the milk supply chain that is the issue," he said.
"Short term the consumer would say they are getting cheap milk...but how stupid is it for people to wake up in the morning relying on farmers to supply their food, when those farmers are unsustainable."
Blair MP Shayne Neumann said Labor was working on finding a solution to dairy farmers' concerns.
"Negotiations between the National Farmers Federation and the Food and Grocery Council broke down...when they were working on a voluntary code of conduct," he said.
"So we will appoint an independent mediator to negotiate that code of conduct... tasked with bringing all the people in the supply chain together to finalise a fair code. We have said that if they can't negotiate we will look at further options... including a mandatory code."
LNP candidate for Blair Teresa Harding said the Coalition was "committed to a root and branch review of the competition framework".
"We will ensure that all business, big and small, have a level playing field," she said.
"The Coalition will initiate an arms-length and independent examination of the current competition and trade practices framework and tools. It will examine how they are applied and what their outcomes are, if they are keeping up with emerging trends, and whether outcomes are consistent with what was intended."