Littleproud lays blame for massive new drop in dairy farm numbers
Supermarkets, unions, drought and poor advocacy are all to blame for a massive drop in dairy farm numbers laid bare by last week's levy poll figures, Agriculture Minister David Littleproud says.
The dairy levy poll data showed the number of Australian dairy farms entitled to vote was just 4401, a 13 per cent fall in two years from the 5013 farms in 2019/20.
Mr Littleproud said drought had hit the industry hard and many farmers had taken the opportunity presented by high land prices to leave the industry but he said supermarkets were also responsible.
"I think that supermarkets also played a significant role in that, in basically devaluing the industry," he said, referring to the dollar-a-litre milk war.
"There were big structural changes that need to take place and it doesn't surprise me, but it concerns me deeply," Mr Littleproud said.
While he said dollar-a-litre milk had been "broken, the way forward for the industry required "harmony" and "clear direction".
"I don't think supermarkets, not only on dairy but on a number commodities, are covering themselves in glory and I think that's one of the things that we want to look at, particularly the Nationals, and we'll be bringing our Coalition partners with us on this one, is that there needs to be better reform around how supermarkets deal with perishable goods," Mr Littleproud said.
There would be greater market transparency, he said, that would mean farmers had the same information about production levels and costs as supermarkets, so they could negotiate on a more level playing field.
The Australian Milk Price Initiative, which launched a month ago and was given $500,000 in funding after last election, was an example of a tool designed to increase transparency.
The Minister said the next phase would be to strengthen laws surrounding supermarket negotiations with farmers.
At the moment, he said, the penalties for breaches were just "a cost of doing business" for supermarkets.
"We need to shift to make sure those regulatory guardrails are clear to them but, if they step outside it, there's a penalty and it should be a sizable penalty so they know that, if they breach, it's not just writing out a check for $60-odd thousand dollars, they actually feel it with some financial might," Mr Littleproud said.
On the question of "harmony", Mr Littleproud described Australia's dairy advocacy as "fragmented".
"If you've got fragmented representative bodies, it makes it difficult to know actually what producers really want and that then means that it's difficult for a minister to make a determination," he said.
That fragmentation of dairy advocacy had been obvious, for example, when it came to developing the mandatory code, Mr Littleproud said.
"It was very difficult when you had different forces articulating different things to try and get it all into place," he said.
"Ultimately, what it means is that it either delays any action being taken or action being taken at all."
There had been a great deal of division in the lead up to the dairy levy poll vote, with peak national body Australian Dairy Farmers taking the unprecedented decision to defy its own national council and recommend no increase in the levy.
Mr Littleproud wouldn't be drawn on whether he felt the levy poll was a vote of confidence in Dairy Australia.
"Look, I don't think I want to get into the minutiae of politics of the dairy industry, that's for the members to decide," he said.
"But obviously, in any industry, it's an important principle that levy payers get to determine the percentage, the amount that they put out there and that's a principle but I'll continue to protect regardless of who and what industry body is there."
He would not say whether dairy farmers should have been given the option of a decrease in the levy, or whether the committee that decided on the voting options was truly representative of grass roots farmers.
Instead, Mr Littleproud said there was a mechanism that allowed levy payers to challenge the committee and that angst surrounding producer levies was common across most industries.
He said he had already been approached about having processors pay levies alongside farmers to help fund Dairy Australia, and was happy to explore that possibility if it was supported by industry.
Asked whether he would only act with the backing of peak processor body, the Australian Dairy Products Federation, Mr Littleproud said he needed to investigate further.
"That's the legalities that I'd have to work through but, if in principle that's where industry wants to go, then I'm prepared to explore what legal options I have," he said.
"I'm not afraid to do that if that's where industry thinks that should go, and if they can articulate a reason for that, I'm prepared to explore it."
It's the shortage of labour, however, that has united dairy advocacy groups around Australia.
The Morrison government announced the Ag Visa in September, promising there would be workers on farm by Christmas but only Vietnam has so far agreed to allow its citizens to participate.
Mr Littleproud laid the blame at the feet of the Australian Workers Union.
"We've only been able to get the Vietnam to sign up to the visa as the first country because the AWU demonized farmers and said that they'd exploit their workers so they went to embassies and ambassadors and said to them not to send their citizens because Australian farmers would exploit them," he said.