Coalition promises milk price index

25 May, 2016 09:45 AM
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Barnaby Joyce talking with farmers in Victoria last week.
$2 million will be allocated to establish a commodity milk price index.
Barnaby Joyce talking with farmers in Victoria last week.

THE Coalition will seek to implement a transparent milk price index if re-elected, to avoid a repeat of the dairy industry viability crisis caused by late season retrospective price cuts from Murray Goulburn and Fonterra.

Federal Agriculture Minister Barnaby Joyce today announced $2 million will be allocated to establish a commodity milk price index, in a package of support measures to support impacted dairyfarmers.

Other key elements of the support package are:

  • $555 million in Dairy Recovery Concessional Loans;
  • $20 million to fast track the upgrade of the Macalister Irrigation District;
  • $900,000 for an additional nine rural financial counsellors in Victoria, Tasmania, South Australia and NSW;
  • $900,000 for Dairy Australia’s ‘Tactics for Tight Times’ program.
  • Fast tracking Farm Household Allowance applications with 18 more Department of Human Services employees processing claims.
  • Appointment of a Department of Human Services dairy industry liaison officer.
  • Redirection of two Department of Human Services mobile service centres to dairy regions.
  • The assistance package was fine-tuned when Mr Joyce visited north-east Victoria last week and other regions holding meetings with dairyfarmers and industry representatives to gauge their concerns.

    Calls from Australian Dairy Farmers to adjust the eligibility criteria to access $20,000 in cash grants that are normally delivered for communities hit by natural disasters such as floods and fires was not successful.

    Mr Joyce said a re-elected Coalition government would work with the dairy industry to establish a commodity milk price index to help ensure the domestic dairy industry did not find itself in a tough situation again, where dairy processors unexpectedly reduced farm gate milk prices late in the season.

    He said the pricing index would introduce greater transparency and market signals for domestic and global milk prices.

    “The Coalition will consult with the industry on the design of the index that would provide dairyfarmers with valuable information for use in supply negotiations with processors and to assist in following international price trends,” he said.

    Mr Joyce said the Coalition was also making $55 million immediately available in Dairy Recovery Concessional Loans for Murray-Goulburn and Fonterra suppliers this year and access to $500 million in concessional loans over 2016-17 and 2017-18.

    He said the 10-year concessional loans would be funded by expanding the drought concessional loan scheme to include dairy-specific criteria.

    Mr Joyce said the Coalition was allocating $900,000 to the Rural Financial Counselling Services in dairy production areas to ensure farmers received the farm business financial advice needed.

    He said another $900,000 was going to Dairy Australia to continue rolling out one-to-one business advisory support via the Tactics for Tight Times program.

    Human Services Minister Alan Tudge said the Coalition was taking immediate action to ensure eligible dairyfarmers had fast-tracked access to the support they needed to get through the tough times.

    “We’ve ramped up the number of staff processing Farm Household Allowance claims,” he said.

    “An extra 18 people have been brought in to process claims and to work directly with farming families on their individual cases, with a special focus on people in financial hardship.

    “Where a farmer is facing real hardship and we have received the full details, a decision can be made almost immediately.

    “If there is any difficulty obtaining the information we need to assess a claim, Farm Household Case Officers can talk to the farmer’s accountant or financial adviser to help get the information needed.”

    Mr Tudge said the Coalition would also appoint a dedicated dairy industry liaison officer to work on the ground with dairyfarmers and local communities to co-ordinate support and services.

    “I encourage any farmer with questions to contact the Farmer Assistance Hotline on 132 316, which is running on extended hours from 8am to 8pm each day,” Mr Tudge said.

    Mr Joyce said the Coalition was delivering assistance measures now as an immediate response under the Caretaker Conventions and not waiting until after the July 2 election.

    “In a sign of our strong confidence in the future of the Australian dairy industry, a re-elected Coalition Government will commit $20 million to build the upgrade of the Macalister Irrigation System in Gippsland,” he said.

    “The Macalister project will upgrade the 1920s and 1950s era Southern-Tinamba area irrigation network delivering almost 10 gigalitres in water savings which can be put back into growing the region’s agricultural production.

    “The Coalition values the contribution our dairyfarmers make to their regional communities and the nation as a whole and we are proud to support them throughout good times and bad,” he said.

    Mr Joyce said the concessional loans of $1 million or half of what the farmers owed - which ever was less – was what dairyfarmers had asked the government for and would help them get through the crisis that had hit the southern part of Australia.

    He said to qualify for the concessional loans, the government would initially be looking at people who were dealing with Murray Goulburn and Fonterra because they’re at the “crisis centre”.

    They will have to prove to the government that they’ve been affected by the downturn in prices, he said.

    “That won’t be very hard because some people have gone from about 42 cents a litre for milk down to 14c and for me that’s a crisis,” he said.

    Shadow Agriculture Minister Joel Fitzgibbon said he’d assured Mr Joyce his party would “do nothing to delay any action from the government” but had little expectation on the outcome of the Coalition’s dairy support package.

    “I’m obviously still working on Labor’s own package - Bill Shorten and I will have some more to say about that over the course of the next few days,” he said yesterday.

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    Colin Bettles

    Colin Bettles

    is the national political writer for Fairfax Agricultural Media

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