Dairy farmers plan to walk away from industry after years of financial uncertainty | eDairy News

Dairy farmers plan to walk away from industry after years of financial uncertainty

Mr Dalitz has made the tough decision to put his dairy farm on the market.

“I’ll miss the cows but one day I just decided it,” he said.

The combination of low milk prices and high feed and water costs have put enormous financial pressure on the Dalitz family.

“None of our boys are interested in milking cows and I’m 50 now, and it’s just getting harder and harder to make a living from it,” he said.

With a $70,000 annual interest bill just to keep the farm running, the third generation farmer is not surprised the next generation does not want to follow in his footsteps.

“I’m happy for our kids to do whatever they want to do, and they’ve probably seen the worst ten years of dairy farming that there’s been,” he said.

“Our oldest son is 20 so he would’ve been 10 when the drought started and all that sort of stuff, so I don’t blame them for not going into dairying.”

Mr Dalitz is not alone.

A recent national survey of dairy farmers found less than half remain confident about the future of the industry, down from 75 per cent four years ago.

In some parts of the country, over a quarter of dairy farmers are thinking about quitting.
Tensions between farmers and milk processors

Dairy farmers say part of their lack of confidence is due to the past behaviour of milk processors.

In 2016, Murray Goulburn and later Fonterra announced sudden and retrospective milk price cuts to farmers, sparking a crisis across the dairy industry.

Gary Kerr from the lobby group Farmer Power said it destroyed the trust between suppliers and processors.

“The impact was huge on dairy farmers, it really was,” he told 7.30.

“As a result there was suicides, there was family split ups, there was farmers walking off the land and that’s been ongoing since then.”

The Government asked competition watchdog ACCC to investigate, and earlier this year it released its long-awaited report.

One of the key recommendations was a mandatory code of conduct for dairy processors, which it claimed would “address problems arising from the large imbalance in bargaining power and information that exists between dairy farmers and processors”.

Mr Kerr said the Government should legislate the mandatory code of conduct.

“It means that farmers can change processors, if they want, without any penalties or breach of contract or anything like that if those processors aren’t offering a decent price,” he said.

Mandatory or voluntary code of conduct?

Almost every state dairy industry lobby group in the country has backed the mandatory code, except for the Victorian and national peak body.

Terry Richardson, from the national dairy farmer lobby group Australian Dairy Farmers (ADF), said it was reviewing the existing voluntary code first.

“ADF hasn’t backed a mandatory code or a prescribed voluntary code,” he said.

“We’ll continue with a review of the voluntary code of practice, which has been agreed or been put in place with the agreement or support of all the processors and all the state farming organisations.”

ADF receives around $1 million of funding from milk processors every year — double what farmers contribute.

Mr Richardson disputes claims that this influences the organisation’s policy positions.

“It’s not a bad look because there is a clear line of accountability for that money or the funds that we receive from processors,” he said.

He also denied recent media reports that two processors had threatened to withdraw their funding unless the ADF opposed the mandatory code of conduct.

Agriculture Minister David Littleproud said he was open to a mandatory code of conduct if there is broad industry consensus on the issue.

ADF said it hoped to declare its position to the minister by the end of the year.

Processors have been ‘despicable’

Ben Govett is a third generation dairy farmer, but like Mr Dalitz he thinks he will probably be the last in his family on the land.

“If there’s not major changes then I definitely wouldn’t want [my son] to go down that path,” he said.

“For the amount of work you put in, the reward’s just not there and I think there’s a lot easier ways to live your life and have a better life than dairy farming at the moment.”

He said dairy was a tough industry at the best of times, but the behaviour of milk processors had made it even tougher.

“The processors have been pretty despicable in their actions over the last couple of years, particularly Murray Goulburn and Fonterra with their clawbacks,” he said.

“While the other processors didn’t follow the same suit they still used it to their advantage and cut their own prices in the following seasons. I think that’s the big issue.”

Mr Govett is hoping the mandatory code of conduct will be introduced to restore the faith of farmers before too many more leave the industry for good.

“There’s always days where you think, ‘why am I doing this and why should I keep continuing in an industry where I’m not making any money and I’m working you know 100 hours a week in the rain and the heat and the cold mornings?’.

“But I do really enjoy the industry, I love cows, I love farming. So as long as I can hold on and the banks will keep dealing with me, I guess I’ll keep trying.”

7.30 contacted both Fonterra and Murray Goulburn but they declined to comment.

By: Lauren Day

Source: ABC

Link: http://www.abc.net.au/news/2018-08-08/dairy-farmers-plan-to-walk-away-from-industry/10051510

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