Tuesday, 15 October 2019
I seek leave to amend general business notice of motion No. 172 standing in my name for today relating to the dairy industry.
I move the motion as amended:
That the Senate—
(a) notes that:
(i) in 2000, the dairy industry in Australia was deregulated, and since that time milk production has fallen from close to 12 billion litres a year to 8.8 billion litres a year, while the population has increased from 19 million to 25 million people,
(iii) the number of dairy farms has declined in Queensland from around 1500 to about 380,
(iv) Queensland dairy herds are now in immediate danger through a failure of the winter and summer seasonal crops, and the shortage of quality feed means it is likely that whole herds will be sent to the slaughterhouse and families destroyed,
(v) the Australian Competition and Consumer Commission’s (ACCC) dairy inquiry report was handed down in April 2018, and found that an increase in the fresh milk price in supermarkets would not benefit dairy farmers, only the processors,
(vi) none of the eight recommendations in the ACCC’s report have been implemented by the Federal Government, including the Mandatory Code of Practice which means that farmers are still being forced into unfair and unconscionable contracts going forward for the next five years,
(vii) there is an immediate need to deal with the imbalance in bargaining power between dairy farmers and processors by legislating to make unfair contracts and, in particular, multi-year contracts (which bind farmers but not processors) unlawful because dairy farmers do not have the means to pursue these unfair contracts through the courts, and
(viii) the power imbalance between farmers and processors directly impacts farmgate milk prices; and
(b) calls on the Federal Government to:
(i) provide immediate additional financial support to dairy farmers who cannot feed their herds,
(ii) implement all of the ACCC recommendations, and
(iii) task the ACCC to investigate how it can regulate the price of milk per litre paid by processors to dairy farmers to ensure a viable dairy industry.
The government opposes this notice of motion in relation to the re-regulation of the industry because the industry does not support this. Government backed industry in 1999 when they sought deregulation and will continue to support Australian dairy farmers. The industry is doing it tough due to a combination currently impacted by the effects of drought and high-input costs for electricity. The government is implementing a mandatory code of conduct to increase fairness and transparency between dairy farmers and processes and to support the industry in addressing the ACCC dairy report recommendations. The code will help address the imbalance in bargaining power between farmers and processors. The code is being developed in consultation with the industry and will support farmers to address egregious contracting practices. An exposure draft of the code will be released in the coming months for industry feedback. It's expected that the code will be in place by mid-2020. The government is also providing $1.51 million to Dairy Australia and to Australian dairy farmers to improve farmers' business literacy for contract negotiations and to develop a standard form contract.