Federal election 2016: ditch $1 milk or face controls, supermarkets told

Barnaby Joyce has warned the big supermarkets to axe their $1-a-litre home-brand milk.

Mypolonga dairy farmer Gino Pacitti and Winter the cow join protesters outside Adelaide’s Parliament House yesterday. Picture: Kelly Barnes

Federal Agriculture Minister Barnaby Joyce has warned the big supermarkets that unless they axe their $1-a-litre home-brand milk, a re-elected Coalition government will force a price rise.

Mr Joyce stopped short of backing a compulsory 50c levy on fresh milk called for by dairy farmer groups, but said he would not put up with the two dominant retailers causing a “rolling crisis”.

The Deputy Prime Minister yesterday announced farmers hit by record cuts to farm-gate milk prices could access cheap government loans worth $555 million.

Mr Joyce’s price threat came as hundreds of dairy farmers rallied in cities, demanding a fairer milk price and an end to their exploitation by big dairy companies and Coles and Woolworths.

“Retailers need to understand the momentum is there nationally for farmers to get a fairer deal, $1-litre milk that is cheaper than bottled water is not fair,” Mr Joyce said. “It is seen now by consumers as a bad thing that rips off farmers; it is affecting (the supermarkets’) good corporate names, so they should change it.

“Retailers don’t want the government to jump on them, but we will if they don’t do anything.”

Addressing more than 400 dairy farmers in front of Victoria’s Parliament House yesterday, Farmer Power vice-president Alex Robertson thanked city consumers for supporting struggling farmers by buying branded milk rather than $1 supermarket milk.

“We don’t need more loans, we need a levy that would hold up the milk price and save jobs — and it wouldn’t cost the government anything,” Mr Robertson said.

Three weeks ago Australia’s biggest milk processor, Murray Goulburn, slashed its farm-gate milk price from $5.60 a kilogram of milk solids to $4.75-$5.00/kg for the 2015-16 financial year, when farmers typically budget for a rise at the end of the season. When Fonterra also cut its price to $1.91 for the next two months, below the cost of production, it was feared a fifth of the nation’s 6000 dairy farmers would go broke or leave the industry.

Independent senator Nick Xenophon said it was a “national disgrace” that milk could be sold for $1 a litre and cause such pain.

“It should never have come to this; $1-a-litre milk price is not sustainable; you are all collateral damage in a five-year war between Coles and Woolworths,” he told the Melbourne farmer rally.

“If we have to have an emergency levy put on milk, so be it.”

Yesterday Mr Joyce told the 3700 dairy farmers supplying Fonterra and Murray Goulburn — most in Victoria and Tasmania — they could apply immediately for loans at 2.66 per cent interest. The 10-year loans of up to $500,000 will require interest-only repayments for five years.

They would enable farmers to repay “overpayment debts” averaging $120,000 that Fonterra and Murray Goulburn imposed on milk suppliers by backdating 15 per cent price cuts to July.

Farm leaders welcomed the loan scheme but said fairer milk prices and an end to the crisis, not more debt, was a better answer.

“It’s wrong and politicians know it’s wrong; until the clawback is abolished and steps taken to ensure it can never happen again there will be no confidence in the dairy industry,” farmer Alan Symonds told the rally.