MILK: by News WeeklyNews Weekly
Calls to re-regulate WA's dairy industry
, September 20, 2003
The Australian Milk Producers Association (AMPA) recently submitted a report to the Western Australian Government's review of dairy industry deregulation, arguing that the industry needs to be re-regulated for the industry to survive.
AMPA says that three years after deregulation, the number of farmers has fallen from 411 to 290, with 720 jobs lost in support industries, representing a $18.6 million annually loss to local communities.
AMPA argues that consumers need a daily, even supply of milk all year round and, without intervention, farmers have no market power to obtain a sustainable income in the face of the concentrated power of the supermarkets that have forced milk processors to pass on lower prices to farmers.
Deregulation was justified as a means to make milk cheaper to consumers. In fact, the price to Perth consumers has risen, even after allowing for the 11cents per litre government restructuring levy for the industry.
AMPA said that if farm incomes continue to fall, it means there "is no money left for investment, there's no money left for farmers and, if you have no farmers, you have no milk".
They have set down a plan for orderly operation of the industry to guarantee the future of farmers and milk supplies. They propose that:
- Farmers be allocated an entitlement to supply milk, backed by legislation to stop the sale of unauthorised market milk from within or from outside the state;
- These entitlements can be traded between all Australian dairy farmers, within and between states, ensuring the plan is compliant with Australia's Constitution which requires free trade between the states;
- The WA Government establish a mechanism for these entitlements to be traded, based on the NSW model prior to deregulation;
- A starting price be established for market milk that reflects the true cost of production, with six monthly reviews of price inputs to determine the price of milk at the farm gate;
- The plan to stay in place until such time as the top 25% of West Australian dairy farmers can farm to the export price for milk products; and
- A dairy authority be established to implement this plan.