Price war backlash as Farmer Power pans industry body

GRASSROOTS lobby group Farmer Power has criticised peak industry group Australian Dairy Farmers (ADF) for downplaying the effect of dollar-a-litre milk sales by supermarkets.

The group, formed in south-west Victoria last month to represent hundreds of disgruntled farmers, said supermarket price wars were having a disastrous effect on rural industries and small businesses.

It also warned of potential for imported UHT milk to replace fresh milk at retail outlets.

“With the advent of $1-a-litre milk Australia-wide, the losses incurred by dairy companies and farmers are significant and this is costing the agriculture industry,” Farmer Power said.

“Imported dairy products from countries that offer subsidies to their farmers are coming into Australia, also putting pressure on farm gate prices.”

Farmer Power took aim at the ADF after its board chairman Noel Campbell was quoted in a newspaper as saying it was not milk discounting, but the high Australian dollar, higher power costs and higher feed costs that were hurting producers.

He later clarified the comments by saying discounting was not affecting southern states as much as northern states.

Farmer Power said bluntly it disagreed that discounted milk had not affected the industry.

“We refer to Kirin, which since acquiring National Foods and Dairy Farmers, has written off more than $2.1 billion in four years and have been quoted as directly linking these to the supermarket wars,” the group said.

“A loss of $500m a year for four years is unsustainable.

“These costs are then being shifted on to dairy farmers,  with lower payments for milk and increased cost of manufacture.”

Farmer Power quoted Dairy Australia figures showing the average Victorian dairy farmer received 50 cents a litre in 2007-08, but 40.6 cents last financial year — a 20 per cent decrease.

Meanwhile, the United Dairyfarmers of Victoria has organised an open meeting for tonight in Warrnambool’s Wannon Room to discuss the industry’s plight.

Claire Miller and Norm Repacholi, of Dairy Australia, will talk on markets, free trade and the high dollar while Robert Poole, of Murray Goulburn, will give a processor’s point of view.

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