GRETA dairy farmer Justin Evans believes there are plenty of stones still unturned and welcomes news of an inquiry into the dairy industry.
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Agriculture Minister Barnaby Joyce on Thursday announced he and Treasurer Scott Morrison had decided the Australian Competition and Consumer Commission would undertake an inquiry into the dairy industry under part 7a of the Competition and Consumer Act.
“I think all dairy farmers will welcome an inquiry,” said Mr Evans, who milks about 150 cows at Three Creeks, Greta with his wife Brooke.
The Evans have cut their dairy herd by almost 100 since the dairy crisis began in late April.
“As long as it’s done soon and they don’t just say it’s going to take two years to get some sort of full conclusion.
“I think it needs to be a number one very high priority and we’re entitled to see the results within a 12-month period.”
The ACCC now has the power to demand information as part of its investigation into the dairy industry.
“This will give the power to request information, this takes our level of investigation into the current situation into a more forensic form, some of the questions you’ve been asking will be fleshed out,” Mr Joyce said.
This announcement came at the end of a dairy symposium in Melbourne, in which farmer representatives and key supply chain stakeholders discussed the challenges facing the industry including low milk prices and supply contract uncertainty.
“I’ve had discussions with the ACCC with what further actions are required and the ACCC has said to be of assistance they have suggested this is what is needed,” Mr Joyce said.
“When you asked me the question how can we ever stop this from happening again, we do it by making sure we have all the information about how this happened in the first instance.
“The ACCC will now go to work to be able to order and request information as to exactly what happened with this fiasco,” Mr Joyce said.
Independent Member for Indi Cathy McGowan welcomed the announcement.
“I will be following the ACCC inquiry really closely,” Ms McGowan said.
“The findings could have far reaching implications for all Australian agricultural industries.”
In late April, 10 months into a dairy farmer’s year-long season, Murray Goulburn Co-operative Co., Australia’s biggest dairy processor, announced it could cut the price it paid to farmers for their milk from $5.60 per kilogram milk solids (kgms) to between $4.75-$5.00, which took the price below the cost of production for many farmers.
In May it was announced the ACCC was investigating the companies over cuts to the farmgate milk price.
”If we can get a good inquiry ... it’s still about accountability,” Mr Evans said.
“You just don’t want to see this thing happening, it is just so devastating for the whole industry.
“I think it is just being accountable for the decisions they’ve made this year and making sure it doesn’t happen again because it’s just not acceptable.”
Mr Joyce foreshadowed that Murray Goulburn would be under close scrutiny in the inquiry, as the price setter in the Australian dairy industry.
He said granting increased powers to the ACCC would work with other measures the government has taken including supporting an "effects test" – that would make it easier for farmers and other small businesses to prove when bigger players use their position to squeeze them out of the market.
He said this measure would give greater fairness and transparency through the supply chain.
$1/litre milk was also a hot topic at the symposium, Mr Joyce said.
“The days of dollar a litre milk have gone because it sends all the wrong messages, and even consumers now are turning off it because they just say: ‘All I’m doing when I’m buying that is buying a form of exploitation, I don’t want to be part of it. I’m happy to pay an extra 50, 60 cents, whatever it is, I don’t need some farmer working for $4 or $5’.”
Australian Dairy Farmers acting president David Basham said strengthening the ACCC powers was the “next logical step” and the peak body wanted fairness in contracts between farmers and processors; the end of $1/L milk, and for the discussions with government to continue.
He said the concessional loans needed to be tweaked to better support struggling dairy farmers.
United Dairyfarmers of Victoria president Adam Jenkins said Mr Joyce’s announcement around the ACCC and further investigations was great.
“I think this warrants a serious investigation – you’ve got a supply chain of farmers bearing the risk for decisions that are made up the chain and I think that’s what we need to put the emphasis on,” he said.