The QDO this week made a submission to the senate dairy enquiry which is currently underway. The QDO submission focussed on retail milk pricing and sought adoption of recommendations that will establish a fair, long term solution to Australia's dairy crisis by solving the current problem of retail milk pricing.
The single national milk pricing policy of major retailers – whatever its purpose or intent – directly causes unfair and unreasonable business conditions for dairy farmers in Queensland. The Queensland dairy industry is completely dependent on the domestic market and that retail fresh white milk pricing, including $1/L sales, determine the price paid to farmers.
QDO sought the following outcomes from the senate inquiry:
- Milk pricing policies in Australia are causing hardship resulting in otherwise, sustainable dairy farmers being forced to exit the industry often at significant personal financial costs to their families and to their physical and mental health, and the consequent harm to local communities;
- The hardship caused by milk pricing policies arises from the market power of those setting those policies;
- Pricing milk below cost in Queensland and other locations has the effect of unfairly and inappropriately excluding proper competition and manipulating the market, as well as causing hardship;
- The hardship experienced by dairy farmers have flow on effects to the economic well-being and sustainability of rural communities;
- An ‘effects’ test be introduced;
- Retail prices of fresh white milk should reflect the cost of selling the milk in each region that it is sold to allow dairy farmers, all retailers and all milk brands to compete on a level playing field;
- Allowing retailers to sell milk under the cost of acquiring that milk without an equitable allocation of costs and a reasonable profit is anti-competitive and should be stopped;
- If those who set farm-gate prices by setting wholesale and retail prices will not self-regulate immediately to resolve this serious long-understood problem, then Governments at every level in Australia should immediately take every legal, legislative, enforcement, and moral suasion action available to resolve the problem on a regional level.
QDO will work closely with the dairy Senate enquiry and its Queensland chairman Senator Chris Ketter to try and bring an end to $1/L milk.