PRIME Minister Malcolm Turnbull has pledged to hold discussions with milk processor Murray Goulburn post-election, along with Nationals leader Barnaby Joyce, to address issues underpinning the dairy pricing crisis, including supplier contracts.
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Mr Turnbull was questioned about the dairy crisis during an interview with Sydney radio broadcaster Alan Jones, ahead of Saturday’s federal election.
It comes as Murray Goulburn also announced this week an average effective opening price of $4.31 per kilogram milk solids for the 2016-17 year, with the prospect of farmgate milk price step-ups during the season to $4.80 per kgms.
Mr Jones acknowledged the Coalition had provided $555 million in concessional loans for distressed dairy farmers but he said producers didn’t want more debt, only a fair farm-gate milk price, given their industry was in “crisis”.
He referred to a special clause “buried” on page 140 of the Murray Goulburn unit trust prospectus which gave company’s directors the right to cut dividends to investors in favour of paying more to farmers.
Mr Turnbull said if the Coalition was re-elected he and Mr Joyce would sit down with the management of Murray Goulburn and its directors and “really go through these issues”.
“We are in caretaker (government) at the moment, as you know we are a few days out from the election but there are a number of elements in the way these dairy farmers have been treated that is very, very troubling,” he said.
“I haven’t gone through those documents in the detailed way that you have but - this is a matter of real concern to the government.
“It is a real concern to Barnaby – he’s Agriculture Minister and Deputy Prime Minister - as well and myself.
“We will sit down with them (Murray Goulburn) and we’ll get a briefing from them.”
Mr Joyce also released a statement saying he and the Prime Minister would meet with the Murray Goulburn board and management post-election, to discuss the global and domestic challenges facing the business.
He said the Coalition government would continue to stand by Australia’s dairy farmers following announcements of lower 2016-17 farm gate milk opening prices but was already delivering a $579m support package to help farmers manage low price challenges and return to profitability.
“Murray Goulburn’s new opening price is a big fall from the record high opening prices announced over the past three years in 2013, 2014 and 2015,” he said.
“Coming on the back of a tough summer and autumn season, many farmers will need assistance managing the new low price environment and this is why the Coalition is delivering low interest dairy recovery concessional Loans for the next two years through to June 30 2018.
“At an interest rate of 2.71 per cent, falling to 2.66pc on August 1, these loans are already open for application in Victoria and Tasmania and for expressions of interest in South Australia.”
Mr Joyce said Murray Goulburn’s 2600 suppliers could apply for the government’s concessional loans.
He said his Department would brief the incoming government on any implications of 2016-17 milk opening prices for the dairy industry and for the Coalition’s dairy assistance package.
A symposium of dairy farmers, processors and retailers will also be convened, he said, if the Coalition was re-elected to discuss industry solutions to the challenges exposed by Murray Goulburn’s retrospective farm-gate milk price reductions and cheap supermarket milk.
Mr Joyce’s statement said Murray Goulburn’s new opening price was the lowest since 2009 when farmers were paid just $3.60 kgms and no assistance was provided by the former Rudd-Gillard Labor government.
It also said Warrnambool Cheese & Butter had announced a $4.80 kgms opening price; Bega (Tatura Milk) had announced $5.00 kgms; Burra Foods $4.40 to $4.60 kgms; and Australian Consolidated Milk $5.30 kgms.
It also said Burra Foods and Australian Consolidated Milk had both indicated they expected to be able to offer farm-gate price step ups through the season.
Shadow Agriculture Minister Joel Fitzgibbon released an open letter to dairy farmers saying he understood yesterday the crisis “grew a whole lot worse for you, your families and the local economy”.
“The further price cut we all feared was coming has arrived and many of you will now be wondering how to keep your head above water,” a statement said.
“When the crisis first hit, I wrote to the Board of Murray Goulburn calling on them to invoke their power to return more money to you, the cooperative members, through a higher milk price.
“Barnaby Joyce refused to back Labor's call.
“Yesterday the company did the opposite – cutting the milk price further instead of raising it.”
Mr Fitzgibbon said Mr Joyce had “washed his hands of helping farmers to secure a better deal” and instead “delivered piecemeal relief after the fact – too little, too late”.
“What he won't tell you is that you have the power in your own hands to come together and improve your situation,” he said.
“The Competition and Consumer Act allows small businesses and sole traders like you to bargain collectively with bigger firms when there is a public interest in doing so.
“The Australian Competition and Consumer Commission can provide an authorisation for that bargaining to take place if it seems smaller businesses are getting a raw deal.
“Remember, the retailers and processes need you as much as you need them.
“Barnaby Joyce refuses to stand with you on this - Labor will because we put people first.”
The dairy pricing crisis was ignited by Murray Goulburn’s retrospective price cuts in late April which other milk processors followed.
The government’s support package also includes $2 million to establish a milk price index to increase pricing transparency and $900,000 for additional Rural Financial Counsellors.
The Australian Securities & Investments Commission and Australian Competition and Consumer Commission have also been appointed to investigate underlying issues with the milk pricing crisis.