Thursday, 14 May 2020
That so much of the standing orders be suspended as would prevent the Member for Kennedy from moving the following motion forthwith:
That the House:
(1) notes that:
(a) on 6 May 2020 the Minister for Agriculture put out a media release titled "Time to stop milking dairy, fair go for farmers";
(b) nearly 500 dairy farmers have left the industry in the past year;
(c) the ACCC in 2018 identified that there is a market imbalance between processors and farmers;
(d) in the state of Queensland alone the number of dairy farmers has dropped from 1,305 in 2000-2001 to 356 in 2019;
(e) Australia had 12,896 dairy farms in the year 2000;
(f) in 2018 there were just 5,699 dairy farms, a reduction of 57 per cent which is likely to have increased in the last 12 months;
(g) in the North Queensland dairy area before deregulation farmers got 60.4 cents per litre, but after deregulation they got 41.1 cents;
(h) Dairy Australia's Situation and Outlook March 2020 report says dairy farmers have been impacted by the summer bushfires adding additional price pressures to their operations, including in:
(i) NSW, 32 dairy farms on the south coast and far south coast and eight on the mid coast;
(ii) North East Victoria, 35 dairy farms directly affected and 11 more operations significantly impacted;
(iii) East Gippsland in Victoria, approximately 30 dairy farms affected in the direct fire zone with varying degrees of impact, including two known to have lost major assets; and
(iv) South Australia, 12 dairy farms affected by fires prior to Christmas;
(i) Dairy Australia has also stated a range of factors weighed on economic growth last year, including geopolitical tensions, trade policy uncertainty, social unrest and stressed emerging markets and overall, growth in global output fell 0.7 per cent to 2.9 per cent, the lowest level since the 2008-09 financial crisis;
(j) the Australian Dairy Situation Analysis dated May 2019 states that Australian dairy farmers operate in a deregulated and open market, leaving them quite exposed to the product price adjustments induced by global market shocks and associated flow on impact to farm gate milk prices, which, coupled with increased volatility in the availability and pricing of key production inputs such as water and feed has undermined local farmer confidence in the long term dairy market outlook and the scope to extract reliable returns from their milk to build a longer term future; and
(2) calls on the Government to:
(a) give more support to Australia's dairy farmers;
(b) instruct the ACCC to develop a minimum farmgate milk price;
(c) enforce the minimum farmgate milk price through the Dairy Code of Conduct; and
(d) as an interim measure, provide a mechanism for mandating the voluntary milk levy until the minimum farmgate price is established or create an offence to purchase fresh milk below the minimum price to farmers that will be set by an arbitration authority designated by the ACCC.
I represent one of the three areas designated in Australia as being the biggest and most at risk. Bega was another area that was designated as one of the biggest and most at risk. On the day before dairy deregulation, we were getting 60c a litre for fresh milk. The day after we were getting 41.1c a litre. Thirty per cent of our income was taken off us overnight. Every person in this room, imagine if you got a telephone call and were told that 30 per cent of your income was to be taken away tomorrow. That's what happened to these poor farmers.
For those that advocate for free markets, I strongly advise that they sue the universities they went to for not telling them that free markets do not include a situation where two retailers have 80 per cent of the marketplace. That is called an oligopoly, and proof positive is the fact that within one day the price had gone from 60c down to 40c. That's not a free market. That clearly is an oligopolistic pricing mechanism, where two, three or four people control the price. If further proof were needed, as Fred Cudor pointed out to me, if Coles and Woolworths could decide arbitrarily that they could put 20c a litre on milk to help drought affected dairy farmers then clearly they're controlling the marketplace. Just two people in the marketplace could unilaterally decide to kick the milk prices up 20c, further proof that it is not the market setting the price but the two giant supermarket chains.
I'm not attacking them. They have a responsibility to their shareholders to maximise profits. The honourable opposition member who will be seconding this motion, Mr Joel Fitzgibbon, has pointed out on numerous occasions that they have a responsibility to maximise profits to their shareholders. They're going to play by the rules, but we set the rules. The rules are based upon a free market when there is no free market, clearly. If overnight you can chop the price down 30c and then you can put it up 20c literally in one day, there is no free market. You're just deciding whatever price you want to put on it and that's the price it will be. That is the necessity for minimum pricing. Quite frankly, intelligent people—and there are a lot of unintelligent people out there—know that the government members are getting constant publicity because they are saying: 'Oh, this is dreadful. Oh, we must have a code of conduct. We've got to put a code of conduct in.' Well, they got the code of conduct in and we got 3c out of it. Consumers are paying 20c.
I can't speak for every farmer in Australia, but there are only two factories left in Queensland. One is in Brisbane and one is in North Queensland. There are a million people in North Queensland, so it's a very sizeable factory. For that area with a million people, I can say very definitely that we got 3.1c. So the consumer's paid 20c and the farmer got 3.1c—and it was to help the farmers! I don't know what farmers got helped, unless you consider 3c a help.
An arbitration commission—it was a fair claims commission, if you like—set the price for milk to the farmer at 60c a litre. If you extrapolate that price to prices currently, 20 years later, then you come up with a figure of 94c a litre. That's what they should be getting, and they're getting 60c a litre. I don't want to get tangled up with figures, but you don't have to be told that every dairy farmer in this country is going down. Some of the big boys think that, by getting bigger, they are going to be all right. I had discussions many years ago now with Tony Perich, the second biggest milk producer in Australia. He is in Penrith, outside of Sydney, and he's milking over 2,000 milkers. That's fantastic. I don't think anyone in Queensland is doing 700, and he was doing over 2,200 at the time. He said: 'We're losing money. If you think you're going to get bigger and that will somehow solve the problem, it won't, because I'm as big as there is and I'm still going broke.' For those stupids who think they can stay where they are, they will be gone because of their stupidity. You can take your free market and every intelligent person who believes in free markets—