ROCK bottom dairy prices have New England MP Barnaby Joyce demanding a royal commission into Australia’s supermarket giants.
The cost of milk has not risen above $1 per litre since 2011 and both Woolworths and Coles have been accused by dairy farmers of profiteering during the drought.
“We all know why they’re doing it,” Mr Joyce said.
“They’re doing it so consumers walk all the way to the back of the shop to get their carton of milk and on the way back they pick up other items.
“That means dairy farmers are paying for the advertisement for the retailer, for many years we’ve been saying to retailers, ‘Fair go, this is outrageous, we’ve got to stop it’.”
Dairy farmers were thrown into crisis again in 2016 when late-season retrospective changes to the farmgate prices paid by the two biggest dairy processors in Australia hit farmers incomes significantly.
The changes were the catalyst for an Australian Competition and Consumer Commission inquiry into dairy, the results of which were released earlier this year.
The big supermarket chains used their bargaining power with processors to deliver savings to the consumer, but the ACCC report shows the responsibility lies with processors to pay a higher wholesale price to the farmer.
In fact, increasing the price of milk at the supermarket would have little impact on the income passed on to farmers.
The future of the Australian dairy industry is at risk if nothing changes Mr Joyce said.
“It’s very hard to get a person who’s never grown up on a dairy farm to walk in off the street with millions of dollars in capital to set the farm up, train and have the veterinary skills to run a dairy herd, plus get up at half-past-four and go to bed at 9pm every day of the year,” he said.
“Because the cows don’t take holidays, it’s a 365 day per year job – are you prepared to do that? Of course many people aren’t.”