The Guardian August 30, 2000


Deregulation hits dairy farmers

by Andrew Jackson

Diary farmers are expecting a further blow to their livelihoods as 
supermarket discounting drives down the price of milk.

This week the large supermarket chains have cut prices of their house brand 
milk between 10 and 20 per cent in competition for market share.

While this price cut is only temporary and therefore will have little long-
term benefit to consumers, it is expected the corporations will pass the 
cuts on to dairy farmers, forcing their incomes lower.

The fresh milk market was deregulated on July 1, and dairy farmers saw an 
instant drop in their fresh milk income from 54 to 27 cents a litre.

The profit margin was then pocketed by the milk processing corporations, 
who did not pass on the savings to the public.

It is expected most small dairy farmers, up to one third of the Australian 
total, will lose their farms to agribusiness corporations during the next 
year.

The price drop sees the supermarkets not only compete against each other, 
but going to war against corner shops, who do not have the market power to 
compete with the discounting or dictate farmers' earnings.

Once the agribusiness corporations gain monopoly control over dairy 
production, just watch the prices go back up  higher than ever.

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