THE impact of the dairy industry crisis is spreading, with small south-west towns such as Cobden experiencing business closures and job losses due to declining sales and rising debts.
The crisis has prompted the Cobden Business Network, which involves 105 businesses, to come out in support of the south-west based dairy farmer activist group Farmer Power and protest at the lack of support for dairy farmers.
The network said the crisis was placing the future of Cobden in danger because it was threatening employment in the town’s service sectors.
“Cobden is almost 100 per cent reliant on the profitability of dairy farmers to keep its businesses viable,” the network’s representatives Kelvin White and Janelle Rohan said.
“Without a strong primary industry, many of these businesses will not survive and just like the dairy farmers campaigning for a better milk price, they are already looking at the wall,” Mr White and Ms Rohan said.
“Residents work at the local milk factory where a decline in milk production will result in job losses,” the business network said in a statement.
“Other businesses which support the dairy industry are not employing people as accounts remain unpaid by their dairy farming clients.
“Our business network was formed in mid-2012, only because of the downturn in activity we were already experiencing.
“This decline has persisted for almost 12 months now and we have no hope of turning the trend around while dairy farming continues to be an unsustainable business.
“We will not be the only country town in this position.”
Frank Martin, of Cobden Home Timber and Hardware, said a number of rural service businesses had closed in the area because of the dairy industry crisis but declined to name them.
He said his business was allowing staff to take leave because sales were down significantly. Mr Martin said a key federal government policy was to make Australia the food bowl for Asia but it was doing little to stop the departure of food producers during difficult times.
Annette Thorne, of Cobden Tools and Trailers, said she had not replaced a staff member who left late last year because of the drop in sales at her business.
Mrs Thorne said she had to use a debt collector to get some of the money owed to her business and had to carefully manage the credit she gave customers.
Reid Stockfeeds’ Cobden operations manager Trevor Gardner said the tough situation in the industry meant his company had to extend the credit terms to 90 days plus to about 20 per cent of its customers.
“The feed companies are carrying farmers at the moment,” Mr Gardner said.
The industry crisis was “a culmination of a lot of things”, he said.
A dry summer had meant farmers had to buy in a lot of feed, milk prices were low and the high Australian dollar was discouraging exports.
Mr Gardner said while the dairy industry was in a tough situation, “it’s not all doom and gloom”.