Exclusive interview with Ag Minister: the code, the levy and a lack of leadership

In an interview with Milk Maid Marian, the federal Minister for Agriculture and Water Resources, David Littleproud, has made some extraordinary comments.

The Minister:

  1. is open to a levy on a range of dairy products (not just milk) if industry asks;
  2. believes a retail levy should be imposed until there is “market purity”, which means true competition for milk at the farmgate;
  3. says the supermarkets have a big role to play in the sustainability of Australia’s dairy industry;
  4. wants industry to come to him with ideas about how to halt the exodus of dairy farmers but says the ADF has not made any requests of him that would address farm profitability.

I hope the interview stimulates debate about how our industry has responded to the crisis over two years. Worth watching all the way to the end, so grab a cuppa.

 

 

8 thoughts on “Exclusive interview with Ag Minister: the code, the levy and a lack of leadership

  1. Really great interview Marian. Thanks for your efforts.

    I’ve got to say that I was pretty concerned when the Federal Ag Minister blithely talks about levies and extending these levies to other products without once mentioning the people who have to pay them – the consumers. I understand the drought levy and support it but I cannot see any logic in extending a levy (and making consumers pay more) simply because the industry can’t work out its supply chain issues. The last levy for structural reform that consumers paid was in 1999 I think (11c/l).

    The other thing I (still) don’t understand is the $1 milk issue. Given every man and his dog has investigated and reported on this issue surely it boils down to two possibilities: 1. The farmers selling milk into this $1 market are doing so fairly and are just more efficient than other farmers or 2. The farmers selling milk into this $1 are doing so unfairly and the ACCC should act (doesn’t need a test case does it?).

    • Thanks very much, Ian.

      Unfortunately, dairy food prices have been artificially suppressed due to a distorted market.

      In 2011, Coles cut milk prices back to 1992 prices. We are now in 2018 so, effectively, the price of milk has not risen in 26 years, despite the cost of making the product increasing along with CPI. That’s a recipe for disaster.

      Let me put it another way: would consumers be happy to be paid the same wages they received in 1992?

      To your other point, farmers do not have control over where our milk is sold or at what price to the end user.

      • Thanks Marian. I understand your point and wouldn’t want to be seen supporting Coles in what they did. It’s just that punishing your customer for the sins of your own supply chain doesn’t make a lot of sense to me.

        And being even more cynical than normal – say the 10c/l levy is introduced longer term and on cheese etc. In one year’s time Coles decide to drop their milk price by 10 cents. What happens then? Another levy? As to cheese why would I not switch to NZ or EU cheese that is cheaper and just as good once this tax applied? I guess the point is, levies can create perverse outcomes.

        (I should say I’m coming from this as a supporter of Australian dairy farmers, even if I am critical of the levy idea. My family spends quite a lot on dairy items each week, all branded, 90% Australian.)

        • Look, I’m with you, Ian. I don’t like the idea of a levy, either, but the Australian retail system is obviously broken and until it can have some form of major surgery, dairy farmers need life support.
          I’m assuming the levy would apply to imports as well as locally made products.
          Thank you so much for caring about our futures. We need people like you.

  2. Must be an election coming, trying to buy time until after the election. Urgent market reform needed not more of the same bandaids.

  3. There is probably no one best marketing system, so a blanket free market may not be the best for all products and customers. Whilst Governments try to keep out of being involved, they need to take some responsibility for providing for the needs of the Australian population. We often talk about a ‘level playing field’, but what does this mean?? Do we have a workable definition of this. One of the above comments mentions imports being cheaper than the Australian produced products like cheeses. How many food products imported don’t have financial assistance from their county of production. How does the level playing field fit this situation? The milk supply chain needs to be looked at as the farmers component of the supply chain has a different power position to the milk processing position and then the retailors who seem to control the system because of their market power/position. Marian pointed out the price of milk and how it has not changed for many years. All this means is that farmers have made significant changes in their production techniques otherwise we would probably not have a dairy industry. If we want a dairy industry, changes are needed, particularly in attitudes and thinking 180 degrees from the norm, might just help!!!
    With the drought, I remember the time of the Govt building Dams and economists then saying that the farms down stream would have the value of their properties go up due to the new found irrigation position.
    Change is NOT easy, but the govt should take the lead or the National Farmers Federation will probably not achieve their GOAL of $10 Billions worth of Agric production by 2030. If we do not look at our marketing system now, what will we do in 20 or so years when population goes up significantly.

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