National Farmers' Federation

NFF sceptical about milk floor price

The National Farmers’ Federation says ‘sure’ ask the ACCC to look at a floor price for milk, but it remains highly cautious about simple solutions to the dairy industry’s complex problems.
“Our dairy sector is under significant pressure, there’s no doubt about that,” NFF President Ms Simson said.
“We are always willing to listen to new strategies that might ease this pressure and to ensure a fair price for farmers; this includes hearing the ACCC thoughts on the merits of a minimum farm gate milk price.”
However, Ms Simson said Labor’s floor price idea appeared to be a nod to the past rather than a serious strategy for the future.
“We need a dairy sector that is strong, sustainable and competitive at home and on the world stage.
“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.
“We’d be really interested to see if and how a regulated floor price might enhance the dairy sector’s global competitiveness.”
“It’s imperative that any such measures are considered in full consultation with, and with support from, the industry – most importantly farmers.”
Ms Simson recognised that a move by Woolworths this week to scrap $1 milk was not the sole answer but said it was definitely a step in the right direction.
“A guaranteed return of an additional 10 cents per litre to farmers whose milk is sold to Woolworths is a real and tangible benefit to the hip pocket.
“We’re calling all other major supermarkets to follow suit, with the same or ideally, larger increase.”
Ms Simson said the NFF was keen to see the implementation of the Dairy Mandatory Code of Conduct, which was agreed to last year by industry and Government.
The Code includes making milk supply contracts subject to unfair contract legislation.
“The majority of dairy farmers are largely family operations who can be at a distinct disadvantage when negotiating with the might and force of large processors.
“It can only be a positive for farmers to be afforded the unfair contract term-protections, now enjoyed by other small businesses, when negotiating new milk contracts.”
In the past, the ACCC’s has also suggested a joint commitment by farmers and retailers to better educate consumers about the dairy industry.
“We’d certainly support providing information to consumers to explain the effort and cost of producing one litre of milk, so shoppers can make a more informed buying decision,” Ms Simson said.
Ms Simson said it had been heartening this week to see a focus on fixing the dairy industry’s woes. However, she said the NFF strongly cautioned against entertaining a return to floor pricing and regulation.
“Australian agriculture has benefited from a market free of intervention.
“The dairy industry’s challenges are complex and there is certainly no easy fix.
“We commit to continuing to work constructively with our member, Australian Dairy Farmers, and the Government and Opposition to find a real solution that delivers a sustainable Australian dairy industry for the future.”

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