House debates

Thursday, 21 February 2019


Dairy Industry

10:29 am

Photo of Damian DrumDamian Drum (Murray, National Party) Share this | Hansard source

I understand that the government has important legislation it needs to get through, but I cannot let this debate go on without commenting. Right at the moment, the dairy industry, certainly in the Goulburn Valley, is doing it very, very tough. Primarily this is all about input costs—the cost of water, the cost of hay and the cost of electricity. What we need to do is we need to have a general conversation or inquiry into the profitability of dairy. But this is a cruel hoax against an industry that is on its knees. This is a cruel hoax that is being played out for purely political reasons by the Labor Party. I understand the member for Kennedy has ideological reasons and he fully agrees with what he is saying. However, there is no practical way that this can actually work, and the ACCC's report recently handed down effectively says that. It says that you can't have this opportunity if you only produced fresh milk. If Australia only produced fresh milk, which, I think, is produced by five per cent or six per cent of all dairy farmers and if we only sold that fresh milk in Australia, you could institute a floor price, provided the government was prepared to pick up the free fall whenever the cost of sales didn't meet the cost of production.

Yesterday, the member for Hunter actually said he wanted to set a floor price that was going to be over the price of production. Is that over the price of production right now, where input costs are high? Or is that over the cost of production from years gone by? There is no way you can set a floor price over and above. I asked the member for Hunter, 'How much are you prepared to pay to make sure you prop up this floor price?' 'We will not pay anything,' he said, 'We're not going to put any money into this.' You can't have a floor price for all those struggling farmers out there if you're not prepared to stump it up when the price of milk slips below the floor price that you create.

This is just all politics. It is cruel. It is a cruel hoax on the people who are doing it incredibly tough, people who are exiting this industry after 20 and 30 years. They're exiting because the input costs right now are too expensive for them to make money. But for you to be playing down this part is disgraceful. I'm sorry to the member for Kennedy, but what we really need is a conversation about the profitability of dairy, where we take everything into account and look at all the different commodities we actually make out of milk, because fresh milk is only five per cent or six per cent of the total milk that is produced.


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