A proposed “drought levy” on the national milk price has sparked fresh debate in Wagga and the Riverina.
Originally the brainchild of the Queensland Dairy Organisation, it would see milk prices rise an extra 10 cents per litre, to cover the growing cost of livestock feed for drought-affected farmers.
Simone Joliffe and her husband Neil operate a dairy farm in Wagga.
Mrs Joliffe, who also serves as the director of the Australian Dairy Board, does not believe the levy will be anything more than a short-term hand-out.
“The Australian Dairy Board’s goal is to remove discounted supermarket prices altogether, so that the profits can flow back to the farm gate to help farmers keep a sustainable business,” said Mrs Joliffe.
Once a thriving agricultural industry, dairy production in the Riverina has steadily declined over the past three decades. Now there are eight dairy farmers in the region, with three supplying the local processing factory.
At the turn of the century, the nation produced 12 billion litres of milk each year.
Now, that is down to nine billion, with an estimated 45 million litres coming from the Riverina.
Having traversed more than 60 years in the business, Ladysmith farmer Syd Clarke has seen the changes from the front line.
He does not believe the 10 cent levy will go far enough to address the ongoing problems.
“If just 20 cents was added to [the price of] every litre, and a family uses about five litres in a week, that’s an extra dollar a week that’s getting back to the farm,” said Mr Clarke.
“But the increase needs to apply not just to milk but to milk products. That would help keep the industry alive.”
Two years ago it cost 40.1 cents to produce one litre of milk.
With the drought’s increase to hay and grain, that has now risen to 46 cents per litre.
Yet farmers receive about 36 cents per litre in the springtime due to the dollar per litre consumer price.
“People generally can’t appreciate how much it costs to produce,” said Mr Clarke.
Despite milk’s inertia, other comparable products – like bottled water – have continued to climb.
“Things can’t stay stagnant, bills keep coming and there’s maintenance costs involved with running a dairy,” said Mr Clarke.
The Australian Competition and Consumer Commission has also touted a mandatory code of conduct that will address some of the industry’s ongoing struggles.
As yet it is unclear what this code will entail, but Mrs Joliffe is hopeful it will spell out two-way cooperation.
“The industry needs to work with the government on building the code,” she said.
“The biggest concern has been understanding what the code’s performance standards will be, what the accountability methods will be, including the independent dispute resolution.”