Thursday, 5 December 2019
I rise to take note of the Minister for Agriculture's response outlining what the government is doing for the dairy industry. I commend the minister because this government is taking action to support the dairy industry. We are also bringing the industry with us on the journey. We are consulting on the mandatory code of conduct; we have consulted all year. We've been talking to the industry since the ACCC made the recommendation, which we are going to deliver on by January in line with what we have said we would do.
Let's not beat around the bush here. The reason we have to have such an initiative is that, in 2011, our consumers in this nation were told that milk was worth less than bottled water. It was not consumers asking for discounted milk prices. It was some marketing guru's bright idea to bring prices 'down, down' and tell consumers that agricultural products are not worth the cost of production. Let's—
Senator Patrick interjecting—
I'll take the interjection. I am more than happy, Senator Patrick, to work with you—and with my colleague Senator McDonald, who is all over this issue—to have a thorough review and work out how we can address the divesture laws. But let's get back to those supermarkets. Today we see in The Sydney Morning Herald that the ACCC is fining Coles $5.25 million because yet again their marketing does not match their promises. They promised to pass on 10c a litre to farmers in drought, and they reneged on that deal: 'Oops, we had an agreement already to increase our milk prices paid to farmers, so in reality we'll give them the 10c until our predetermined increase goes through and then we'll cut back our 10c contribution by the equivalent.' That is not fair because the Australian consumers, who have not whinged at all about paying that extra 10c a litre and who actually feel that it is the right thing to do to pay for their milk and for the cost of production, expected Coles to pass on that full 10c a litre. I commend the ACCC for investigating that issue, hammering it home and fining Coles the appropriate amount, which will go straight to the farmers.
The relationship, though, between processors and farmers is the crux of it, and this is what the mandatory code is all about. In the past, the processors actually signed those supply agreements with the supermarkets. So when the Australian public rightly stood shoulder to shoulder with farmers after the Murray Goulburn debacle and said, 'We will not pay a dollar-a-litre milk; we are going to go and buy branded products,' unfortunately all that did at the time was reward Murray Goulburn because it was Murray Goulburn who had signed a supply agreement with Coles and with Woolworths to supply branded and unbranded milk. So Coles and Woolworths enter an agreement with the processors, the processors then turn around and have an agreement with the farmers, and it's the farmers who get hung, drawn and quartered. They cop it. We need those processors to act with integrity. We need those processors to pay the farmers the cost of production. Then, if Coles and Woolies are trying to stand over them, we need our processors to stand up and say, 'This is not on.' Call it out. Call it out publicly or call it out behind closed doors—I don't care—but let's get our farmers a fair price because that is what I'm told our farmers want.
Our farmers are battling high input costs—record input costs. The price of feed and fodder for their cows is through the roof. If they are an irrigation dairy farmer, their temporary water prices are through the roof, nearly at record prices. They're not quite paying what they paid during the millennium drought, but it's very close. Electricity prices are through the roof to the point where dairy farmers are actively looking at mechanisms and ways they can disconnect from the grid and become self-sustainable, and I commend them for that; I think that is great. They're putting in solar panels. They're looking at turning methane into power. That is great. But, while they're struggling with these high input costs, we've got to make sure that they get the fair price they want. A floor price is not necessarily going to deliver that. And a floor price will make the processors just as lazy as they've been in the past, because a floor price will effectively become a ceiling price. There will be no impetus for our processors to pay the extra for better quality milk—for milk with higher protein content. There will be no requirement to do that because they can say: 'Well, that's the floor price set by the ACCC. We're just going to accept that and that's a standard price across the region.'
We've listened to industry. The other thing we're doing is, because Senator Hanson set up the Senate inquiry, respecting that process. We are using that process to hear from the range of stakeholders involved, including the supermarkets, I'm led to believe, and we're going to see what that report recommends. But Senator Hanson, who insisted on that inquiry, is not even respecting the process that she initiated. She is going ahead of the pack, before the report comes in, before the recommendations are made, before all the submissions have been sifted through and collated, and that is not fair on the people who are participating in that inquiry in good faith, including the New South Wales Farmers Federation Dairy Committee, including Australian Dairy Farmers, including Queensland Dairyfarmers' Organisation. We need to respect that process and let those people have their say. I honestly believe that the outcome of that inquiry will be a fair price with concerns about the impact of a floor price.