Floor price in danger of pricing out Aust dairy

Floor price in danger of pricing out Aust dairy

Opinion
Aa

In a recent opinion piece, federal Opposition spokesperson for Agriculture and Resources spokesman Joel Fitzgibbon made an argument for a milk floor price. SADA now expresses its concern regarding the ruinous path Mr Fitzgibbon would steer the industry down.

Aa

OPINION

In a recent opinion piece, federal Opposition spokesperson for Agriculture and Resources spokesman Joel Fitzgibbon made an argument for a milk floor price, loudly supporting a bill from Senator Pauline Hanson which sought to introduce a milk floor price.

Mr Fitzgibbon chose to single me out for particular criticism for not joining in this call and stating that "John Hunt should be uniting the industry".

Consequently, SA Dairyfarmers' Association now expresses its concern regarding the ruinous path Mr Fitzgibbon would steer the industry down where he tends to control the levers of power.

The first observation worth making is that Ms Hanson was still circulating substantive amendments to her bill on the morning of its debate - the debate commenced at 12.30pm.

Not minor amendments, but amendments that reflected major policy changes regarding the exact role of the Australian Competition & Consumer Commission.

SADA does not support rushed and ill-considered law making in the dairy industry.

The debate then reflected the worst of political motives.

The ensuing debate represented a conga line of opportunists draping themselves in a veil of concern for Australian dairyfarmers.

We have expressed in other places our gratitude to (Centre Alliance) Senator Rex Patrick for maintaining an objective view and not rejecting invitations to join the conga line.

The concern, which was expressed by many of the dancing Senators, at best reflected a misunderstanding of historical events in the dairy industry leading to flawed conclusions.

The lack of any considered reference to the contents of the bill itself underlined the interest of many speakers in striking poses which would convince observers of their genuine caring posture toward dairyfarmers.

RELATED:Dairy code to be delivered by January 2020

While not a senator, Joel Fitzgibbon, has now latched onto Ms Hanson's Bill and reflecting the same level of understanding as the senators, has waded into the debate describing a brave new world of controlled pricing models that will magically attend to the ailments of the dairy industry.

Mr Fitzgibbon argued the price the ACCC was expected to determine was to be "just above" the cost of production.

No such direction existed in the bill.

The pricing mechanism in the bill directed the ACCC to consider certain issues including the cost of collecting, processing and selling milk products.

If this nation entertains the idea we can dictate a milk price at the farm gate that makes the Australian product more expensive than an imported product and somehow consumers won't turn to a cheaper imported product or importers won't pull out of trade agreements built on our free trade credentials then this notion would simply be wrong.

There was no "just above" limitation in the bill in fact there was not even a direction that the milk should be set above the cost of production at all as it directed the ACCC to include in its considerations the "viability of milk processors", as well as farmers.

Mr Fitzgibbon was correct in being critical of the artifice of $1 a litre milk.

That fabricated price applied by supermarkets was without consideration of the marketplace and the resulting distortion caused pain throughout the supply chain.

Now Mr Fitzgibbon entertains the notion that one artifice replaced with another artifice will fix a problem. Two wrongs don't make a right.

Perhaps if he was more vocal about the supermarkets lifting their price for liquid milk in those regions where the cost of production is higher and so allow the consumer to back their farmers, that would make a huge difference for local farmers and would not put the industry, and country, in jeopardy of losing their Free Trade Agreements.

Dairy must be nationally and internationally competitive.

RELATED:NFF, ADF don't support calls for re-regulation

If this nation entertains the idea we can dictate a milk price at the farm gate that makes the Australian product more expensive than an imported product and somehow consumers won't turn to a cheaper imported product or importers won't pull out of trade agreements built on our free trade credentials then this notion would simply be wrong.

Mr Fitzgibbon's off the cuff comments highlight that in the surreal world of politics the cream doesn't always rise to the top.

He has had the opportunity to meet with industries peak bodies who have expressed concerns over his views but has chosen not to.

As a national legislator, he needs to look at all industry and reject populist politics and lazy thinking.

  • Start the day with all the big news in agriculture. Click here to sign up to receive our daily Stock Journal newsletter.
Aa

From the front page

Sponsored by