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.