Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

I rise this afternoon in the adjournment debate to place on the public record a concern that was prompted during a recent advertising campaign by one of the major supermarket chains. While I was watching television, I saw an advertisement encouraging people to spend something like $80 or more and receive a voucher for 10c a litre off the price of petrol. Immediately I thought, ‘Whose pocket is this consumer saving actually coming from?’ Not long after I saw this advertisement, I received a very disturbing letter from a constituent of mine who is a dairy farmer. This letter explained to me that, if something were not done soon about the farm gate price of milk, many dairy farmers would have to consider leaving the industry.

I took my investigation a little further and discovered that since 1998—that is, two years prior to deregulation in 2000, at which point farm gate prices fell further—farm gate milk prices to the dairy farmer have risen 2.7c a litre from 29.4c a litre to 32.1c a litre. However, the average retail price of milk to consumers at the supermarket over that same period in our three major capital cities—Sydney, Melbourne and Brisbane—has risen 28c a litre from an average $1.23 in 1998 to $1.51. These figures were sourced from the Parliamentary Library and their source was Australian Commodity Statistics. Perhaps it is the dairy farmers and other primary producers who are really funding the fuel voucher campaigns being used by the large supermarket chains.

It is unquestionable that the drought is having a severe impact on many agricultural industries across Australia, but in the dairy industry, where they have longer term supply contracts with processors, the cost of inputs such as feed for the herds rises considerably during a time of extended drought. While I acknowledge that some processors have assisted in providing small increases in per-litre prices to dairy farmers, more needs to be done to help these dairy farmers during this time of drought.

The major supermarket chains at the end of last year said that a basket of essential foods like bread, milk and meat would be dearer as a result of the impact of the drought on their supplies. This may be the case for many agricultural commodities, such as beef and wheat. Farmers perhaps have been getting higher prices for wheat. Undeniably, drought induced shortages have put up the price that the farmer receives for wheat. It is the same with beef and lamb. However, the tighter supply coming from the dairy industry is not resulting in better prices to dairy farmers, as my figures reflect.

I want to get behind the campaign by the Queensland Dairyfarmers Organisation and call on the ACCC to monitor the price of milk, because quite clearly the differential of 28c a litre between the retail price in 1998 and the retail price now is money that is ending up in the supermarket chains’ profit bottom line. Consumers should not be misled that the increased prices of essential goods because of drought are going back to the farmer. The farmers need every cent to stay afloat. Having the ACCC monitor the prices of these products and where the profits are going will mean consumers will be able to rest easy that the increased prices that families are paying for those basic commodities are in fact going back to farmers and that the major supermarket chains are not taking as profits the higher prices they allege they have to charge as a result of the drought. (Time expired)