Labor demands floor price to 'save' dairy industry

Labor proposes milk floor price for dairy industry


Farm Online News
Opposition Leader Bill Shorten (right) and Shadow Minister for Agriculture, Fisheries and Forestry Joel Fitzgibbon.

Opposition Leader Bill Shorten (right) and Shadow Minister for Agriculture, Fisheries and Forestry Joel Fitzgibbon.

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Labor call for a dairy floor price defeated in parliament today.

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A Shorten Labor Government will task the ACCC with testing the efficacy of a minimum farm gate milk price and to make recommendations on the best design options.

Labor believes government intervention is needed to save the dairy sector and dairy farmers and as such bought a motion to debate it's policy for a dairy floor price to parliament today, it was defeated. 

It was doomed to fail on the numbers, but pursued by Labor in an attempt to create negative headlines for the Nationals in particular. 

Labor agriculture spokesman Joel Fitzgibbon told parliament this morning the dairy industry was "broken" because farmers and processors can't make sustainable returns, while supermarkets are generating marginal returns.

"This is a national emergency," he said. "it's not an option to do nothing."

Mr Fitzgibbon expects the policy would be implemented by an independent authority and implemented regionally, calculation a floor price above the production cost of milk in each district.

He said any Labor scheme would avoid the pitfalls of past experience with the wool price, which collapsed dramatically in the 1990s, and was based on a guaranteed purchase of a set amount of production.

Labor's regional affairs spokesman Stephen Jones said the government had failed to address structural problems in the dairy industry because it was "divided and incompetent".

"It should be the National party, and the Liberal party, bringing this to the parliament," he said.

Agriculture Minister David Littleproud dismissed Labor's floor price move as a stunt that had already been dismissed earlier in the year by the Australian Competition and Consumer Commission, in it's review of milk prices.

"It's a cruel hoax to try and politicise the issue," Mr Littleproud said.

In a joined statement realised earlier today by Labor leader Bill Shorten and Mr Fitzgibbon, they said it was not acceptable for farmers to be paid less than the cost of producing their milk.

"If a floor price is needed to end this crisis, that’s what Labor will deliver," the statement said.

"If Australia wants a thriving dairy industry, leaders must act. Business as usual needs to end, and directing the ACCC to assess, test and design a floor price is an important first step in giving our dairy farmers a fair go."

Dairy Connect chief executive Shaughn Morgan welcomed the federal focus on the industry, but said he would hold judgement until more detail emerged.

"The devil is always in the detail. We will welcome the attention on this issue, which acknowledges the market failure of the Australian dairy industry," he said.

The National Farmers Federation will await to assess the scheme. NFF president Fiona Simson is particularly keen to understand the impact of a floor price on exports.

"As an export dependent industry, that exports two thirds of what we produce, prices for Australian agricultural products are largely determined by international market forces," Ms Simson said.

"We'd be really interested to see if and how a regulated floor price might enhance the dairy sector's global competitiveness." 

Labor will also establish a mandatory Dairy Code of Conduct to ensure the dairy market is functioning fairly for all participants. 

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"The Coalition Government has had more than five years to implement a Code of Conduct and has failed. In Senate estimates yesterday the Morrison Government admitted it has kicked the Mandatory Code down the road to July 1 , 2020. Labor will make a Mandatory Code a priority," the media release read.

Labor’s Farm Productivity and Sustainable Profitability Plan would also include a focus on farm extension to ensure farmers had access to the latest productivity enhancing innovation.

Yesterday, Labor criticised Mr Littleproud’s Dairy Mandatory Code of Conduct, which would modify processor contracts with farmers to make them compliant with the business-to-business unfair terms law enacted by the Australian Government in November 2016.

Under questioning in Senate Estimates today, the Agriculture Department said the code would not be in effect until 2020.

“Dairy farmers are struggling now and cannot afford to keep waiting for meaningful Government action,” Labor said in a statement.

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