FED UP: North Burnett dairy farmer Robbie Radel with some cattle.
FED UP: North Burnett dairy farmer Robbie Radel with some cattle. Contributed

Government starts review into milk prices

NORTH Burnett dairy farmer Robbie Radel has welcomed a move by the Federal Government to launch a review into the dairy industry.

"I think it is a starting point, but I don't think it is anywhere near enough," Mr Radel said.

"There is so much more the government could do without waiting for an inquiry to be finished by the end of 2017."

Mr Radel said if the inquiry took that long it would have terrible consequences for the industry.

"If it takes that long to get a result there won't be a dairy industry left nationwide," he said.

"It's too little too late; it needs to happen now.

"If they can shut down the live export industry with a stroke of a pen overnight, they can do the same for the dairy industry in reverse."

Deputy Prime Minister Barnaby Joyce said Treasurer Scott Morrison would request the ACCC undertake an inquiry into the dairy industry, as the Commission had powers to obtain information from companies.

"Our dairy farmers deserve fair returns at the farm gate, as well as transparency in milk price arrangements and supply contracts, which is why I can announce the ACCC will undertake a detailed inquiry into our national dairy industry," Mr Joyce said.

"An in-depth and independent inquiry is a thorough and fair way to uncover inefficiencies and inequities that our farmers face - and identify a way forward.

"I encourage everyone in the dairy industry to contribute to the inquiry - there will be confidentiality arrangements in place to ensure the ACCC gets the information it needs while protecting commercial interests."

Mr Joyce said the Federal Government also committed up to $2 million to establish a commodity milk price index.

Flynn MP Ken O'Dowd said he hoped the inquiry would be able to get to the core of the inequities in the supply chain.

"Most of us realise when we buy a bottle of milk at the store that not much of that value makes it back to the farmer, but the issue is much greater than this," Mr O'Dowd said.

"We've seen a shift in power over many years in the industry, away from the farmers and their co-operatives, toward multi-national corporations who report to shareholders rather than producers.

"There are three key players in the industry, producers, processors, and retailers; the majority of power in the system lies with processors and large retailers.

"We have some of the world's most efficient producers, but they need to be treated fairly."

The ACCC inquiry will investigate sharing of risk along the supply chain, supply agreements and contracts, competition, bargaining and trading practices in the industry and the effect of world and retail prices on profitability.

It will begin in November and report back to the Federal Government in the second half of 2017.

The inquiry's terms of reference and other information will soon be available at www.accc.gov.au