The Australian dairy industry is at risk of imploding unless farmers can be guaranteed a price above their cost of production, says JOHN CARTWRIGHT, president of the Australian Milk Producers Association.
As the suppliers of milk to the Australian public, we are working long hours every day, regardless of weather, so that our fellow aussies and the world can enjoy the highest quality dairy products.
Unlike our fellow aussies though, we can be expected to produce our milk with no idea what we will be paid for it. We can be expected to produce it for less than the cost of production, with no allowance made for our labour! And even opening prices can’t be relied on any more, with our budgets blown as money is snatched away with as little as a days notice! Would our fellow aussies cop that? We think not.
Yet dairy farmers are expected to! And cop it from all angles. When wages or fuel goes up, we wear everyone’s increases but can’t pass them on. We pay levies with no say in their expenditure and for what benefit? During tough times, our supposed leaders and peak bodies hold talkfests to tell us we are resilient, we must face this new challenge, we must become more efficient. Well, we’ve been there, done that. Costs have been cut and belts tightened so much we can barely breath! But what of everyone post farmgate?
With milk prices announced for 09/10, the reality of what we were expecting has emerged. The full impact of a deregulated market with no price support is out for all to see and mainly brought about by the export market sector that was not long ago touted by our leaders as the future of our industry.
As farmers analyse the new seasons figures, we are finding they are far from a sustainable price. Hardest hit will be those still in drought, those lacking water and younger farmers with significant debt levels. Also feeling the pinch will be farmers, buoyed by higher returns of a year ago with the promise of some above average years, who invested heavily in expanding their businesses with costly capital acquisitions and works. Many are saying these prices won’t cover fodder bills and debt will be unserviceable.
We believe large numbers of farms will close, unable to cope with the situation. There will be much stress and anxiety within families, the social breakdown will be terrible and children will be sadly exposed to the household trying to deal with the heart wrenching decisions that will have to be made. Our service providers will be another casualty as farmers have no funds for purchases, repairs or to pay accounts.
If significant numbers of farmers exit the industry then that must impact upon processing plants with losses of milk, leading to rationalization and further costs of transporting milk around the country, further reducing returns to farmers.
We cannot just sit and watch this happen. The Australian Milk Producers Association (AMPA) believes that we need government assistance and we need it quickly. We are calling for a deficiency payment support or a floor price to be put in place. American farmers have such a scheme for these times and we should be able to implement similar.
Of course it would require total support of all in our industry and the challenge is getting everyone on board. Farmers need to say that enough is enough, to everyone post farmgate. We deserve better. We work hard and need to reap some rewards for our efforts. Surely demanding a price that at least covers our cost of production with a bit left over to sustain our families is a fair and reasonable request.
The height of madness is expecting the same people to do the same thing and get a different outcome. We are told the long term future looks bright. This will only happen if big changes are made now. More of the same is not an option. Enough is enough.