Two decades after Australian dairy industry was deregulated, Labor has promised to have the Australian Competition and Consumer Commission (ACCC) investigate the best way to establish a minimum farmgate milk price.
“Labor believes government intervention is needed to save our dairy sector and our dairy farmers,” Opposition leader Bill Shorten said in a statement.
“It is not acceptable for our farmers to be paid less than the cost of producing their milk,” he wrote.
“If a floor price is needed to end this crisis, that’s what Labor will deliver.”
Dairy farmers have been exiting the Australian industry since a major downturn began in April 2016.
Drought, high electricity, grain and water prices have combined with a low milk price to force many farmers out of the industry and national milk production levels are shrinking.
Figures released today showed Australian dairy farmers left the industry in numbers not seen since the Millennium Drought in the past financial year.
And the national herd size has fallen too.
Dairy Australia estimates more than 75,000 dairy cows were culled in 2018, up 5 per cent on the year before.
National milk production is now forecast to drop by 9 per cent this financial year.
Labor’s announcement comes as major supermarkets Aldi and Coles refused to increase the price of their $1-litre-milk, despite Woolworths increasing its price to $1.10.
Woolworths will distribute the extra 10 cents per litre among the 450 dairy farmers who supply it.
While lobby group Australian Dairy Farmers welcomed the Woolworths move, describing it as a “game changer”, the South Australian Dairy Association was lobbying for a “shelf price which reflects all points across the supply chain”.
Federal Agriculture Minister David Littleproud has repeatedly called for supermarkets to increase the price they pay farmers for their milk.
Work is underway to establish a mandatory code of conduct for the dairy industry in a bid to address competition issues.