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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2016-05-17 Daily Xml
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Adjournment Debate

Dairy Industry

Mr BELL (Mount Gambier) (17:02): When bottled water is sold for considerably more than liquid milk, society has lost all reason. The dairy industry needs price stability at profitable levels to allow it to perform securely and with confidence. Dairy farmers are price takers from both ends of the market. They do not get to stipulate the price of their commodity for sale and are readily sacrificed by those charged with the duty of selling their product.

Margins are too slim in most years, and now farmers are not even making ends meet. They are looking at substantial losses for some time to come. The cost of doing business in Australia is way too high. Items that many dairy farmers see as overpriced are wages, superannuation, WorkCover, energy costs, water licences, procurement, insurance, freight, right down to concrete and machinery.

Farmers and regional residents generally also note that the South Australian state government is shifting significant assets from rural areas so that Adelaide can prosper, while foisting increased fees back on those same regional ratepayers. A great example of this is the NRM levy, with fees being put back onto farmers at the worst possible time, particularly dairy farmers. Outside the primary production community, there seems to be no appreciation shown to food producers. Yet, everybody expects the freshest and best quality food at the cheapest possible price.

I note that there is now a strategy in place of checking on your mate's mental health, and the government's household income support will be easier to access for dairy farmers, but quite frankly this is like putting a bandaid on a gushing haemorrhage. The real solution is paying dairy farmers a decent price for their milk so that none of these other measures would be needed.

One such suggestion is putting an emergency dairy levy of, say, 50ยข per litre on milk to halt the decline in the dairy industry in Australia. This is serious and needs serious intervention; otherwise, as I said before, we are going to see many dairy farmers going broke and we are going to have a boom and bust cycle in the dairy industry. Another long-term measure worthy of investigation, which is also milk-based, is co-funding. Co-ops have invested funds that are waiting to build new infrastructure that will take milk from a low-value commodity into a higher, value-added, specialist product. A government co-contribution could help build these new plants a lot sooner.

Another strategy is of course increasing the profile and appreciation of dairy farmers in this state. It is one of those areas in which we are going to see considerable stress on southern regional South Australia which, I would say, is accumulating into the same type of disaster that Whyalla has faced with Arrium. Many southern areas are going to see a market downturn, a selling off of cattle, a selling off of land, and then we are going to have an undersupply of milk going forward.

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