Dahlsen dairy plan: Bob Katter backs 40c fresh milk levy

Bob Katter says the two decades since the deregulation of the dairy sector have decimated farming communities. Read his opinion piece here.

Independent MP Bob Katter. Picture: AAP Image/Lukas Coch

Crossbencher Bob Katter has become the first federal MP to back a push for a 40 cent per litre levy on fresh milk as a way to aid the struggling dairy sector.

The 40c measure forms the cornerstone of the Dahlsen Plan, a blueprint released by former Woolworths chairman John Dahlsen last year to provide suggestions for price stability in the often volatile industry.

It has the backing of National Party great Peter Nixon although his successor — Agriculture Minister David Littleproud — has been notable for his silence on the proposal.

In an opinion piece in today’s edition of The Weekly Times, Mr Katter said the two decades since the deregulation of the dairy sector had decimated farming communities, particularly in his home state of Queensland.

“(Farmers have faced) contemptible lying and deceitfulness of preaching a free market, when 13,000 dairy farmers were selling to two buyers — two supermarket giants,” Mr Katter said.

“There was reduction of income to farmers of 19 cents per litre on average, and an increase in the price of milk from 115 cents per litre pre-deregulation to 156 cents per litre after deregulation.

“By 2005, the major retail chains had made $1130 million per years in extra profit quite literally over the dead bodies of farmers.”

Mr Katter said a 40 cent per litre levy on fresh milk would be supported by most Australian shoppers and provide needed farm-level stability.

“Peter Nixon was one of the few politicians of the late 20th Century that was powerful, highly intelligent and a good Australian. He commented last month that farmers need an extra 40 cents per litre,” the Queensland MP said.

“For NSW and Qld, if you add the 93 per cent rise of the consumer price index to the price, we received then of 59c per litre; almost exactly 40c per litre (in current pricing). Nixon was right in his balancing payments.”

BOB KATTER’S OPINION PIECE

During a 1999 federal National Party room meeting, Victorian Senator Julian McGauran took the call.

“Leader, there is a ridiculous rumour that we are going to deregulate the dairy industry. That would be the worst crash in Australian agricultural history – much worse than any drought or market collapse. We must quash this rumour immediately.”

NSW National Party MP Ian Causley turned to me and said, “You’re not speaking?” We both laughed. Then I said: “The ‘bludgerigars’ will be voting for it tomorrow.”

Causley agreed, and they did.

NSW and Queensland were paying a 7 cent-a-litre levy to the non-fresh milk sector (Victoria).

NSW and Queensland had an arbitration commission — milk marketing boards that set the farmgate prices for fresh milk; both averaged 60 cents per litre for fresh milk.

Victoria’s government had abolished all statutory marketing and farmers were arguably getting 29 cents.

Enter two pieces of disaster. The first? NSW and Queensland wanted the 7 cents abolished. “Why should we sacrifice 7 cents of our income to Victoria?”

The answer of course is if you don’t pay the Victorians to stay at home, the milk will cross the Murray and shatter your statutory marketing prices.

The second? Victoria was told that deregulating the national industry would enable them to cross the border and get the NSW price of 60 cents. A blatant lie.

We now know the truth. Victorian milk didn’t cross the border, but under deregulation the Victorian price of around 30 cents did. This domino effect went all the way up to North Queensland.

In a towering piece of cynicism, the Howard Government called for a vote on deregulation, offering each farmer around $100,000. Most of Australia’s dairy farmers were in and so they claimed these farmers voted for deregulation — they didn’t. They voted to give themselves $100,000 each.

Peter Nixon, one of the few politicians of the late 20th Century who was powerful and highly intelligent, commented last month that farmers need an extra 40 cents a litre, in line with the John Dahlsen plan.

For NSW and Queensland, if you add the 93 per cent rise of CPI to the price, we received then of 59c per litre; almost exactly 40c per litre. Mr Nixon was right in his balancing payments.

He was right in opposing deregulation. And he is right now. The contemptible lying and deceitfulness of preaching a free market, when 13,000 dairy farmers were selling to two buyers — two supermarket giants.

There was reduction of income to farmers of 19c per litre on average, and an increase in the price of milk from 1.15c per litre pre-deregulation, to 156c per litre post-deregulation.

By 2005, the major retail chains had made $1130m in extra profit literally over the dead bodies of farmers.

Ironically it was deregulating Victorian premier Jeff Kennett as head of Beyond Blue who announced there was an Australian farmer committing suicide every five days in Australia, five years after dairy deregulation.

Nixon is right — 40 cents is needed.

● Bob Katter is the independent member for Kennedy

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