Dairy will 'thrive': PM

04 Mar, 2013 03:00 AM
South Australian Dairyfarmers' Association (SADA) president David Basham
South Australian Dairyfarmers' Association (SADA) president David Basham

SOUTH Australian Dairyfarmers' Association (SADA) president David Basham says he’s shocked and disappointed by Prime Minister Julia Gillard's lack of understanding of the Australian dairy industry and its current crisis.

Mr Basham took the rare chance of asking questions to Ms Gillard about the dairy industry’s fate on Adelaide radio last week, where the ALP’s community cabinet meeting was held.

“When the carbon tax was introduced, it clearly stated that agriculture was excluded,” he said to Ms Gillard on air.

“The dairy industry is a high energy user both at farm level and the processing level, and it’s estimated that is going to affect the average dairy farmer by $14,000 to $25,000 in extra costs.

“We can’t pass this on to any of our customers because we compete in a world market and we’re competing with countries that don’t have the same unfair tax burden.

“And we also have in the domestic market, the retailers saying they won’t pass any of the costs onto the consumer.

“What is the Gillard government going to do to make sure the carbon tax does not destroy any chance of the dairy industry surviving the current industry difficulties?”

In response, Ms Gillard said the dairy industry would not only survive but “will thrive”.

“Has the fear campaign about carbon pricing come true?” she said.

“Carbon pricing started in the middle of last year.

“Have you seen astronomical price increases?

“No, inflation is very modest and the inflationary effect is not more than we anticipated.

“Have you seen the economy grind to a halt and us thrown into a depression?

“No you haven’t.”

Speaking to Fairfax Agricultural Media this week, Mr Basham said he was dissatisfied with Ms Gillard's response and inability to comprehend how the carbon tax was impacting dairy farmers’ bottom lines.

He said dairy farmers were currently losing substantial amounts of money, hence the series of well attended meetings in various states to address the looming disaster.

About 250 dairy farmers and industry representatives attended a public meeting hosted by SADA in Mount Gambier in mid-February to consider solutions to the industry’s profitability dilemmas.

One of the suggestions is around collective bargaining, while they’re also seeking access to welfare payments to even put food on the table for some dairy farmers who are struggling more than others.

Mr Basham said the crisis wasn’t just due to the major retail supermarkets selling home branded milk at $1 a litre.

He said $1/L milk was hurting dairy farmers in Queensland, NSW and WA - but in SA he was more concerned about devaluing the product and milk seeming cheaper than water, in the eyes of consumers.

But the immediate impacts of the high Australian dollar are hurting the profitability and incomes of dairy farmers in SA, Victoria, parts of NSW and Tasmania, he said.

He said the high exchange rate is making Australian dairy farmers less competitive on world markets.

“Other countries can out-compete us,” he said.

“We used to export cheese to countries like the US but now we’re importing their dairy products because the high currency rate means it’s profitable for the Americans to do that.

“Free Trade Agreements that we set up at a time when the Australian dollar was low 30 or 40 years ago are now working against us.”

Mr Basham said he wanted the Prime Minister and other political leaders to understand the dairy industry’s current mood, but was disappointed at how sharply the issues he raised were dismissed and seemingly ignored.

“There’s a lot of uncertainty around dairy farming right now and where we’ll be in six months and if we can even keep operating our businesses,” he said.

“The PM’s comments don’t help and just show a total lack of understanding of the real pain and hurt that’s out there in dairy farming community right now.”

Ms Gillard's response also drew the ire of NSW Nationals Senator and Young grain and sheep farmer, Fiona Nash.

Senator Nash said Ms Gillard's claim that dairy farmers will thrive under the carbon tax proved "ignorance about regional Australia in the federal government goes right to the top”.

“The Prime Minister just doesn’t understand and just doesn’t care about the impact of her carbon tax on dairy farmers and so many others in regional Australia,” she said.

“It is an absolute disgrace.

“Australia cannot afford a Labor government that only governs for the two-thirds of Australians who live in the cities.”

WA Liberal MP Nola Marino said the situation for dairy farmers in her South West farming and rural electorate was “as tough as it gets across the board”.

Ms Marino said she was pleased the ACCC had indicated it would start seriously investigating complaints by retail suppliers, against the supermarkets.

In a radio interview this week, Federal Trade Minister Craig Emerson said in most cases the impacts of the carbon tax were miniscule and costs could be passed on to consumers.

But he said the government was working on improving market access for Australian farmers.

Ms Gillard’s office was contacted for comment but did not respond before deadline.

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Don Nicolson
4/03/2013 7:45:56 AM

Nothing new about politcians' modus operandi in this story. When New Zealand was about to introduce its ETS ( Emission Trading Scheme) the Minister of Agriculture (in our National Govt elected 2008) told farming that the new cost would just merge into our balance sheets, effectively saying 'who cares'. This from the same man who stood shoulder to shoulder with farmers against the ETS ...until he was elected to Govt.
4/03/2013 8:20:32 AM

How wonderful to have a PM who understands the intricacies of an industry so well that she can explain them to someone who is intimately involved.
4/03/2013 10:40:10 AM

What did you expect? The womans a perpetual liar and denier. Shes headed for political oblivion with a golden goose feathered pension to break her fall, courtesy of us tax paying mugs who are powerless to stop it. We will be left with another GFC, Gillards Financial Crisis.
ex peake kid
4/03/2013 10:57:08 AM

The problems with milk is finally hitting the lion company, this is the second year that they are having trouble filling orders for milk distrubtors ( i am one) Out of stocks have been for the last 3 weeks, It happened this time last year. Lion blames the fire and floods this year. I dont beleive this. Lion should be looking at their price for the farmers and it might keep some farmers in the industries. The pedulum is finally turning for the dairys farmers
4/03/2013 12:16:22 PM

Hopefully the whole country will thrive after the election, small business and farmers have survived in spite of these clowns in the last few years.
6/03/2013 7:13:17 AM

Before anyone counts their chickens about how much better it will be after the election,ask someone from Farmer Power about what response they are getting out of the Liberal party.Its not much different from whats there now.Jon Cobb told us there's not much he can do when he gets into government so we should look for some one who will.
Cattle Advocate
6/03/2013 7:17:01 AM

The 2011 Senate Milk Enquire ''The commissiom recommends that the Government commission a study of the Dairy Industries in QLD, NSW and WA. The study should focus on the future sustianability of the Dairy Industry in each of these states and their capacity to meet future local consumer demand.'' The SME also wanted the effectiveness of collective bargining to be looked into. A similar study that might be collecting dust was done in WA, the 'Fresh Opporunities' report found that by 2018 if significantly more milk wasnt produced ,74mlts may have to be trucked in at a freight cost of $15+m.
Cattle Advocate
6/03/2013 7:30:34 AM

If $1/lt Milk is justified by a milk glut why are some retailers waiting 3 weeks for their milk, or is this milk going west? How many major SM cutomers would tolerate being told to come back in 3 weeks if they want some more milk? $14-$25,000 might be small potatoes to some but if Dairy Farmers hear from some retailers as bold as brass ,that they wont play the Carbon Tax game and Government says '' In most cases the impacts of the Carbon Tax were miniscule and costs could be passed on to consumers.'' Will starvation kill off our Dairy Farmers quicker than Global Warming?
Cattle Advocate
6/03/2013 7:44:56 AM

While the $218m Dept of CC feeds its $45,500 spent on coffee machines, $9,500 worth of beans last year and that hospitality bill of $217,209 and taxi bill of $225,754, werent we all supposed to be in this together? In 2011-12 MG earned $1.2B in Dairy export income for Aus, yet it could be argued that we are being attacked by the enemy from within on the domestic front, our next generation will need an explaination; lead by Cassandra who hasnt even got to Fruit&Veg and petrol dockets yet.
6/03/2013 7:41:14 PM

Julia's broken promise is set to bite her with a vengeance. Scientists around the world who have been sceptical about GHGs and global warming ( man-made of course) are gathering momentum as they prove time and again that it is a fallacious scam. The organisation Pricipia Scientific International is advancing in an unstoppable charge against this ruse and all taxes associated with it.


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Uh-oh, the secret is out now!
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Well spotted WTF. The Warwick paper(s) are interesting and for other interested readers, they
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Joel there is spin, then there is straight out BS. I'm not committed to either the ALP or the