An $11.4 million assistance package has been unveiled by the Victorian Government to boost financial and emotional support available to struggling dairy farmers.
Farmers have welcomed the support but say it does not address what they see as the core cause of the crisis – the ability of milk processors’ ability to cut their milk price and apply it retrospectively.
The cutbacks announced by major dairy processors Murray Goulburn (MG) and Fonterra in recent weeks mean that many farmers are expected to operate at a loss this financial year.
The funding – which includes $6.2m from the state government and $5.2m from the dairy industry (from the Gardiner Foundation, Dairy Australia and $1 million from MG) – aims to ease the pressure on thousands of Victorian dairy farmers, their families and communities.
The package includes an expansion of Dairy Australia’s Tactics for Tight Times and Taking Stock programs, providing specialised on farm business support; $240,000 boost towards the Rural Financial Counselling Service; $220,000 for two FTE support workers at the United Dairyfarmers of Victoria (UDV) to assist farmers.
The government has set aside $4.5m to support affected farming communities and will consult on how these funds are best spent. Last week the government announced a $1.5m mental health package for dairy farmers.
Scotts Creek dairy farmer Alan Symons said the support measures were “all good” but did not address what he saw as the core problem – milk processors’ ability to cut their milk price and apply it retrospectively to the season.
“There is no confidence in the dairy industry and there will not be as retrospective price cuts stay; we’ve got to get rid of clawbacks,” Mr Symons said.
He said industry bodies’ calls for processors to announce their opening prices for the 2016-17 season as soon as possible were misguided, because farmers were worried they’d be changed again part-way through the season.
The third generation dairy farmer said it was unfair processors had incorrectly calculated what they would be able to pay their suppliers and then force them to pay it back, when farmers had budgeted on the higher price they were led to believe they’d be paid until MG’s announcement on April 27.
He said he was angry that neither the financial institutions that lend to dairy farmers nor politicians had supported calls to ban clawbacks. He said the swiftness with which the State Government introduce regulations in 2015 requiring all raw milk sold in Victoria to include a bittering agent, showed him that it could introduce rules quickly in the industry.
Agriculture Minister Jaala Pulford said the Victorian dairy industry was facing unprecedented circumstances.
“Our dairy farmers are doing it tough. This is something that we’ve not seen in Victoria in the last 40 years.”
Ms Pulford said the government would get economic modelling on the impacts of the price cuts on the state economy.
“We do know that when you count all of the farmgate activity, all the on-farm activity, all of the work in production, all of the work in transport and you put the whole package together, it’s an $8 billion annual contribution to the Victorian economy.
“This is not an insignificant challenge we’re dealing with. We’re talking about a big income hit for thousands and thousands of people.”
An estimated 80 per cent of Victoria’s more than 4000 dairy farms have been hit by the price shock, because they supply the two major processors which dropped milk payments, MG and Fonterra.
UDV president Adam Jenkins welcomed the fund, which he said would help farmers and communities. “When things get tough we’ve got to all stick together and get through this,” he said.
“People need to take stock of where their business is and be quite clinical about that. And then they can move forward.”
Nationals leader Peter Walsh said dairy farmers would appreciate the support announced on Tuesday, and urged the government to roll out the programs without delay. “We strongly encourage the Andrews Government to now work on direct relief measures, like rates rebates and waiver of charges like fixed water costs, which farmers have been raising with us,” he said.
