Jacqui Lambie demands legal action against major milk companies over farm gate price cuts

THE state and federal governments should fund legal action against two milk companies on behalf of the state’s dairy farmers, Senator Jacqui Lambie says.

THE  state and federal governments should finance a group legal action against two major milk companies on ­behalf of Tasmania’s dairy farmers, independent Senator Jacqui Lambie says.

Senator Lambie is meeting dairy farmers on Monday to put together an action plan in the wake of Fonterra’s decision to drastically cut the price it pays farmers for their milk and claw back payments that have been made since July last year.

Senator Jacqui Lambie.

That plan could also include introducing legislation to place a floor price on milk.

“We will not change the minds of multinationals by going to them with a begging bowl and appeal to their better nature,” she said.

“What we need to take to any meeting with them to change their mind is a very big stick.”

The Tasmanian public is rallying behind the state’s dairy farmers after Fonterra said, in line with Murray Goulburn, it would cut the price it pays to farmers by 60c to $5kg of milk solids. Most Tasmanian farmers affected will lose six-figure sums this season.

Despite an industry downturn, Fonterra delivered a net first half profit of more than $400 million in January.

MORE: DAIRY FARMERS WARN OF STRUGGLE UNDER PRICE CUTS

MORE: MILK PRICE SHOCK CUTS TO HIT HARD

Lyons MP Eric Hutchinson said agricultural markets had always been volatile.

“I am calling on Murray Goulburn and Fonterra to ­announce their opening prices for 2016-17 now and not wait until 30 June, so farmers can make sound business plans,” Mr Hutchinson said.

The Tasmanian Farmers and Graziers Association said Fonterra’s announcement had put a dampener on the mood at Agfest.

“While many farmers went to Agfest with a view to spend money, the announcement by Fonterra that it would retrospectively reduce its milk price by 60c a kilo has caused great concern among our dairy members,” TFGA president Wayne Johnstone said.

“We understand that this is a result of world supply and ­demand issues, nevertheless many of our members will be left with a bill of six figures.

“When in the business of farming such announcements at the end of the season can be devastating.

“It is clear that it is time for a broader discussion between producers and milk processors to look at a way to ensure that producers can have confidence in the prices set at the beginning of the season.”