Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

My question is to the

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

I thank Senator McKenzie for her question and note her longstanding interest and advocacy for what is an incredibly important sector for our country. It is in fact the third-largest rural industry in our nation. There are more than 6,000 dairy farmers across Australia and a majority of them do reside in Senator McKenzie's home state of Victoria—more than 4,000 are in Victoria. It is also a sector that makes money for us as a country. Its exports are $3 billion a year and, we think, growing, and we think there is great promise for growth in exports going forward.

But, as Senator McKenzie has outlined, it has been a difficult and challenging year for the sector. Earlier this year, as most senators would know, Murray Goulburn and Fonterra announced retrospective price cuts to farmgate milk prices. They are up to $2 a kilogram of milk solids for the sector, and more than 65 per cent of dairy farmers face a cut of more than 80c per kilogram. On a farm basis, to give a notion of this at a farmgate level, at an individual household level, this meant that an average farm producing 150,000 kilograms a year was facing a drop in revenue, a drop in income, of $15,000 to $90,000—a devastating impact for any family farming business in this country, one that was felt very hard and was very concentrated in a part of Victoria.

Those decisions are why we announced in May a $579 million assistance package for the dairy industry in Victoria, including $555 million in concessional loans, $900,000 for Dairy Australia's Tactics for Tight Times advice program, a $20 million investment in the Macalister irrigation district, and additional rural financial counsellors for affected farmers. It is a very important industry to our country. It does have a bright future, although it has had a tough time, and the government stands with it through these challenging times.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator McKenzie, a supplementary question.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

Can the minister advise what further measures the government is taking to assist the dairy industry?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

In August this year, the Deputy Prime Minister convened a symposium with farmers, processors and retailers to discuss industry-led solutions to this issue. Off the back of that symposium, Australian Dairy Farmers and the Australian Dairy Products Federation have agreed to conduct workshops to begin a process of improving contractual arrangements and discovering improvements within the supply chain as well. Milk processors have also agreed to develop a code of conduct to ensure transparent and unambiguous contracts in the future. The government has also asked the ACCC to undertake a market inquiry into the national dairy industry. This inquiry has commenced and will begin taking public submissions soon. I note Senator McKenzie's interest in that inquiry; next week, she herself will be conducting roundtables around Victoria, in places like Tangambalanga, Congupna and Gippsland and in the Camperdown sports bar. She is a well-credentialled senator, defending the interests— (Time expired)

Stephen Parry (President) Share this | Link to this | Hansard source

Senator McKenzie, a final supplementary question.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

Can the minister outline what these measures will mean for jobs and investment in the sector?

Matthew Canavan (Queensland, Liberal National Party, Minister for Resources and Northern Australia) Share this | Link to this | Hansard source

Again, I thank the senator for her question. It has been a tough time, and it is good to see representatives of Victoria, like Senator McKenzie, getting around the countryside and making sure that what we are doing matches the needs of the dairy sector—so that things like the ACCC inquiry can properly feed into what is happening on the ground in Victoria and make sure we can make the appropriate policy changes, if any, here in Canberra.

But, as I said, we have great hopes for the future of the dairy industry. It is already a strong performer for us in terms of exports. Notwithstanding this difficult year, we think next year and the years beyond will be very positive for the dairy sector, not least because of the trade agreements we as a government have signed and the trade access we have got for the sector—historic agreements with China, with Japan and with Korea. China will remove all dairy tariffs from products there. There is enormous growth in these markets, enormous promise for our dairy sector, and we will have a brighter future once past this very difficult year for the sector.