The Guardian June 7, 2000


Dairy farmers fight milk monopoly

Dairy farmers across Australia vented their anger last week at the 
deregulation of their industry on July 1. Over 600 farmers and farm workers 
(and a dozen cows) in NSW, and over 1000 farmers in QLD marched on their 
state parliaments at the imminent loss of their livelihoods. Legislation to 
deregulate the industry is currently before the NSW and QLD parliaments and 
is well advanced in other states. 

Deregulation is being forced by the unilateral decision of the Victorian 
industry to deregulate on that date, but it is also supported by other 
State governments and the Federal government. Milk processing companies 
such as Dairy Farmers and the big supermarkets are also in favour.

The price of a litre of milk is currently $1.50 out of which the dairy 
farmer receives 54 cents in NSW. But after July 1 the major milk processors 
(some overseas owned) will be able to dictate their own prices and are 
planning to slash the price paid to dairy farmers to as low as 27c a litre. 
This reduction will cut over $85,000 off the average farm income while the 
margin of profit for the processors and supermarkets will sharply increase.

Over 60 per cent of Australia's milk is produced cheaply in Victoria, and 
the industry there intends to aggressively enter the NSW and QLD markets, 
whether the market is deregulated or not.

The loss of income to already struggling farmers will cause the "total 
destruction" of the industry in NSW and QLD, according to the Australian 
Milk Producers Association (APMA).

The APMA, which represents 1100 farmers in NSW, has put forward an 
alternative plan to retain the milk quota system, but allow interstate 
producers to provide a share of the NSW market. 

The Association's director Ken Cork says this would save up to 15,000 rural 
jobs in Australia, where they are already suffering from higher than 
average unemployment levels. However, this plan does not have the backing 
of NSW Labor Agriculture Minister Richard Amery. His Federal counterpart 
Warren Truss has dismissed the plan as unconstitutional and has also ruled 
out a suggestion that the Federal Government use its power to institute a 
national floor price.

Dairy farmers in Australia have already seen the industry fall into the 
hands of big business, with the number of farmers dropping from 30,700 to 
just 13,150 over the last 25 years. Under the new system, market farms 
would have to be milking 400-500 cows to remain viable, when the average 
farm herd is currently only 118.

Hardship

Mr Amery acknowledges the financial hardships that are going to be faced by 
NSW farmers, but will push the deregulation legislation through parliament 
regardless. He states that this is necessary to take advantage of $337 
million being offered by the Federal Government, and does not see how any 
further compensation from the NSW Government would help.

The Federal government's bail-out is nothing more than a sweetener to 
facilitate the "restructuring" of the industry. The government's package is 
not aimed at helping small farms remain in business, but rather as an 
incentive to quit the industry and deliver their livelihood into the arms 
of Agribusiness Corporations. It is a continuation of the farm policy 
pursued by governments for decades  "Get big or get out".

Those who are driving deregulation claim that benefits will flow to 
consumers with cheaper drinking milk. No major price fall is expected 
however, and the $85,000 cut from the income of each dairy farmer will, 
instead, flow into the pockets of the processing corporations and the major 
supermarket chains.

Back to index page