Dairy causes split in LNP

A DAIRY farmer's proposal to restore confidence in producers and stabilise production has been compared to Russian communist policies.

A DAIRY farmer's proposal to restore confidence in producers and stabilise production to meet at least 85% of Queensland consumer needs has been compared to Russian communist policies.

The motion from Matthew Trace, in the LNP's Kenilworth branch, met heated debate at the 2012 LNP Convention in Brisbane on Friday as dairy farmers combated arguments the protectionism approach was the wrong way to go.

Mr Trace said Queensland's dairy industry was in a crisis not seen since deregulation a decade ago.

He said some long-term producers were not being offered new supply contracts as their current ones expired.

"Hundreds of jobs directly and indirectly are under threat as the industry faces rapid retraction with significant reductions in the prices being offered on procession," he said.

"This crisis has not just been brought on by the removal of regulation but rather by the lack of balance and fairness in the contracting and tendering process between the supermarket duopolies, the milk processors - there are only three major ones in the Queensland market - and the milk producers, the dairy farmers.

"Essentially, the large supermarkets have such a large share of the market and the milk processors are beholden to their prices by request which are then passed down the chain to producers in an attempt to hold up processing margins."

Mr Trace said the system was unfair and an "abuse of market power".

He said an effective solution would help prevent "the decline" in Queensland rural and regional communities by maintaining employment essential for the "sole survival of many communities".

"This motion asks the LNP to commit to finding a solution to the problem instead of leaving the industry and hence regional jobs wither and die."

An LNP honorary life member agreed, arguing the government promised to strengthen the Queensland economy including agriculture.

"If ever a group of people needed our support it's the dairy industry. They've been absolutely disastrously damaged by the marketing exercise of the big supermarkets," he said.

But Young LNP president Ben Riley told hundreds of LNP members the motion was "lurching back to protectionism".

He said the government should spend its time and energy opening up land for agriculture, "not slugging consumers through consumerism".

"If we've learned any lesson out of economics in the past 100 years or so, protectionism is bad, it doesn't work and we shouldn't follow that path," he said.

"We are the LNP, we believe in individual enterprise, we believe in free markets, free trade."

Another opposer, from the Nudgee State Electorate Council, said the concept of stabilised production reminded him of Russian dictators Stalin and Lenin.

"If you are saying one must have a set quota for product manufactured and grown within a region for that region, that is the exact slippery slope we are sliding down," he said.

"I have no absolutely no problem with a farmer - whether dairy, cotton, wool grower or beef - with any one of those businesses working and getting a fair price for their produce.

"There are ways to get fair prices that do not revolve around a political party stipulating what price and how much will be made."

Bob Johnson, from the LNP's Stanthorpe branch, stepped in to defend the motion.

"Primary producers in Australia are some of the more efficient in the world and there's not much room for improvement," he said.

"They are being forced out of business because they are being expected to sell their product below the cost of production."

The motion was carried.

Premier Campbell Newman said he would take all the resolutions on board but his parliamentary team would decide what would be implemented.

"The party is a democratic organisation with 14,000 members," he said.

"They're entitled to put up anything they want to have considered at this conference.

"The LNP has its view but as a parliament team we have to represent all of Queensland and do the best we can for all Queenslanders.

"We will always do what we can for Queenslanders ahead of the LNP."

Originally published as Dairy causes split in LNP