Support for Dairy Farmers

There are many in the industry who are doing it very tough at the moment given the global price environment and the decisions made by Murray Goulburn and Fonterra recently to retrospectively cut farmgate milk prices. Those decisions made by Fonterra and Murray Goulburn are decisions that the government are concerned about, and that is why we have acted quickly in response to them. We have listened to the concerns of dairy farmers, holding a number of meetings in the last few months, and during the election campaign we announced a $579 million dairy assistance support package.

 

Senator McKENZIE:  My question is to the Minister for Resources and Northern Australia, Senator Canavan, representing the Minister for Agriculture and Water Resources. Given more than 20,000 Victorians are employed in the dairy industry and many dairy farmers are struggling under the burden of falling milk prices and rising debt, can the minister advise the Senate what the government is doing to assist dairy farmers struggling to stay in business?

Senator CANAVAN:  I thank Senator McKenzie for her question and congratulate her on her re-election and her continuing support for the dairy farmers of Victoria—an incredibly important industry for her state and, indeed, for our nation. As many in this chamber would know, there are many in the industry who are doing it very tough at the moment given the global price environment and the decisions made by Murray Goulburn and Fonterra recently to retrospectively cut farmgate milk prices. Those decisions made by Fonterra and Murray Goulburn are decisions that the government are concerned about, and that is why we have acted quickly in response to them.

We have listened to the concerns of dairy farmers, holding a number of meetings in the last few months, and during the election campaign we announced a $579 million dairy assistance support package. The cornerstone of that package is low-interest loans for dairy farmers of up to $555 million at an interest rate of 2.66 per cent that can be taken over a 10-year period, including a five-year interest-only period. That will help bring down interest expenses for farmers as they refinance and will give them greater cash flow. We are also funding more Rural Financial Counsellors, one-to-one business advisory support for farmers and assistance to help farmers access other forms of assistance and support, including the farm household allowance; a dairy coordinator to help link farmers with state support as well as federal support; and $2 million to establish a milk commodity price index, to give more transparency to farmers to help them plan their operations.

We as a government are confident that this industry will remain fundamentally strong. It is going through a difficult time, but it will be strong again. We are also contributing $20 million to the Macalister Irrigation District, underlining our confidence that the dairy industry will recover from this. We will do everything we can to support it through these difficult times.

The PRESIDENT:  Senator McKenzie, a supplementary question?

Senator McKENZIE:  Can the minister inform the Senate of any discussions the government has held with the dairy industry to further support struggling farmers?

Senator CANAVAN:  As I mentioned in my answer to the first question, the government has been listening to the dairy sector. It has held a number of meetings with dairy farmers and the industry over the past few months. The Deputy Prime Minister met with Australian Dairy Farmers and the president of United Dairyfarmers of Victoria a few months ago, and I welcome and thank the dairy industry's continuing consultation and ability to engage in these matters. That meeting informed the construction of the dairy assistance support package. We listened to dairy farmers, and those proposals were based on those requests.

Since the election, the Deputy Prime Minister and the Prime Minister have met with Murray Goulburn and Fonterra to ask their companies what they are doing to help suppliers. Last week the Deputy Prime Minister held a symposium in Melbourne with the dairy farmers to facilitate discussions and provide additional support. We continue to engage with the sector. It is an incredibly important sector for our economy, and we will do all we can to support it.

The PRESIDENT:  Final supplementary question, Senator McKenzie?

Senator McKENZIE:  Can the minister outline any details of the ACCC inquiry announced by the Minister for Agriculture and Water Resources?

Senator CANAVAN:  As a result of those meetings, particularly the symposium last week with dairy farmers and dairy processors, the Treasurer has asked the ACCC to conduct a market inquiry into the dairy industry. This inquiry will look at the supply chain of the milk sector and will look into the bargaining and trading practices within that sector and the effect of world and retail prices on farm profitability. The inquiry follows on from the inquiry we announced earlier this year into the cattle and beef industry supply chain. We are able to do these inquiries, given the investments that the government has made through its agriculture white paper process and the Agriculture Commissioner we have added to the ACCC. During these inquiries, the ACCC will have recourse to its information-gathering powers and be able to compel witnesses to make sure it gets to the bottom of the trading practices in these markets.

We will continue to work with the dairy sector to make sure we have a strong, efficient and resilient dairy sector in our country.

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