DAIRY INDUSTRY

Mr PENGILLY (Finniss) (15:52): Today I draw to the attention of the house the critical situation facing the dairy farmers of South Australia, in particular, but I will also go on to talk about primary industry generally. Last week, the Warrnambool Cheese and Butter company announced a dramatic price reduction in the price of milk per litre—down to, I understand, 18¢ per litre, with the price dropping to 13¢ a litre in about June.

There are about 300 dairy farmers in South Australia—and I think we already know what happened to the dairy farmers on the Narrung Peninsula. However, about 100 dairy farmers operate on the Fleurieu Peninsula, which is an area of guaranteed high rainfall and regular production, and they are an integral and core part of the farming community and primary industry in South Australia, particularly for the Fleurieu Peninsula.

These dairy farmers employ a countless number of staff. For example, I am aware of one dairy farmer who employs a labour force of up to 15 on a casual basis. They have to secure vast amounts of feed to get them through the dry months. They incur considerable costs in electricity and/or diesel for irrigation purposes to produce green feed during the dry months, which can last for six or seven months. If people visit the Fleurieu at the moment, they will see irrigators going here, there and everywhere in an effort to keep up the production of milk.

What does this mean for South Australia? It means that many of these dairy farmers are in such a diabolical position following the collapse of the milk price that, basically, they will be forced to walk off their properties. Generations of farm owners cannot continue. Prices are way below the cost of production and, quite simply, it is totally impossible for them to continue being dairy farmers.

So, what will that do? In some cases they may turn to beef, sheep or some other pursuit. They may choose to just walk off, go away and do something else. However, what it has led to over many years is that dairy farms, and farms in general, have been subdivided and carved up and are becoming hobby farms. This valuable high production and high rainfall country does not produce with the same intensity as in the past.

This breaks down the fabric of rural life—and it is no reflection on those who come into the Fleurieu, but many of them do not understand the country way of life. They do not get involved to the same extent as many farming families have and they do not continue to support the community in the manner that many farming families have. As I say, it is no reflection on them, but they just do not understand that country life revolves around farming and rural communities and, unfortunately, it makes it very tough to continue. Schools and sporting clubs suffer—and on it goes.

We all know that we are in extremely tough times. We know about the world financial crisis—we get it rammed down our throats daily. We also know we will take a while to get out of it. It is absolutely vital that our dairy industry continues in South Australia and gets through to when the reasonable returns and good times come back.

I call on the Rann Labor government to make a decision as to whether it wants farmers in South Australia—more particularly, in this case, dairy farmers on the Fleurieu Peninsula, who have not much room to move regarding where they sell their milk, or anything else. I call on the government to get active and do something about it. I call on the minister and/or the Premier to meet with the dairy farmers as a matter of urgency and work out some ways so that they can survive and continue into the future.

I do not want to see the Fleurieu—or, indeed, my electorate—decimated by farmers having to walk off their properties because of tough times. There are a number of milk companies around. About 40 per cent of the milk on the Fleurieu is sold to Warrnambool Cheese & Butter—I am aware of that—and there are some other firms that some may be able to go to but, unfortunately, we do not know where this current situation will lead, and we do not know what is going to happen to the other milk factories.

Time expired.