By QDO President Brian Tessmann
The Australian Competition and Consumer Commission (ACCC) Dairy Inquiry interim Report, released last week, not only disappointed Queensland dairy farmers but failed to deliver clear direction and intent to fix the mess destroying Queensland and Australian dairy farms.
It is strange that while the report acknowledges many of the major market issues affecting our industry, it offers precious little in the way of recommendations to fix them. These issues include the fact dairy farmers have little to no market or bargaining power, and carry a disproportionate and overwhelming burden of risk in the value chain.
In fact, the ACCC tries to use this issue to distract attention from the damage caused to the industry by $1 per litre milk. The ACCC report claims that because farmers have barely any market power now, they would receive little benefit if supermarkets ended $1 milk since supermarkets and processors would pocket the revenue. This completely ignores what the Inquiry was set up to do in the first place, which was to fix the whole value chain to allow benefits to flow to the farm gate. It also ignores the $200 million ripped annually from the dairy value chain by supermarket discounting and generally avoids recognising the crippling market failure stemming from the supermarket duopoly.
While QDO supports the report’s only recommendation to change the recently introduced farm gate code of conduct into a mandatory code, it should have been obvious the industry needs far more than this to create a fair and functioning market.
It is becoming clear the ACCC does not have the general intent, operating scope or legislative tools to fix what should be a very fixable issue. So while QDO is willing as always to work with the ACCC with whatever meagre assistance is given, it is time for politicians who support a fair go for Queensland dairy farmers to deliver on the clear political promises and community expectations the Inquiry was originally set up to fulfil.