Dairy review neglects WA

15 Dec, 2004 10:00 PM

THE National Competition Council (NCC) report outlining the health of the Australian dairy industry post deregulation was outdated, misleading and bad news for WA dairy farmers, according to WAFarmers dairy section president Tony Pratico.

NCC acting president David Crawford said the report clearly established that if deregulation had not been tackled, industry, employment and communities would have suffered more than they have through the sometimes traumatic deregulation process.

³It is also important to appreciate that the report makes clear it is proving to be the saviour for the industry,² Mr Crawford said.

³The report shows that a dairy sector still reliant on the price support mechanisms of pre-deregulation would not now be in a position to have a strong future, domestically and internationally, that a tough deregulation phase is making feasible, and a reality.²

But Mr Pratico was disappointed the report was unclear on some critical issues affecting WA producers.

He said it did not address where the 11c levy was being taken from and was lacking in its reporting on the rise of industry exits by farmers after deregulation.

³Since deregulation, the WA industry has lost 25pc of dairy farmers and the report¹s summary that deregulation is a win for both the industry and consumers is blatantly incorrect for WA producers,² Mr Pratico said.

³WA farmers are receiving on average 27c/L at farm gate and this is unsustainable.

"It doesn¹t meet production costs in numerable cases, even with adjustment monies coming from the 11c levy that the consumer was supposed to pay.

"Farmers are exiting an industry that is approaching crisis level and could become a cottage industry.

³While the report covers some regional specifics, it is the national average data that is masking the decimation of the WA dairy industry.

"The report states that the key impacts at farm level are blurred and cites the impact of the drought affecting farm gate returns, when WA was not affected by the eastern states drought, yet our industry teeters on collapse.²

WAFarmers is working at a ministerial level to develop a price negotiating agency for WA milk that is focused solely on getting better prices to farmers and maintaining sustainability for the dairy industry.

³This negotiation agency will be targeting better prices for the farmer and position the producer to become more proactive in setting prices and shifting away from being a price taker with our limited choice of processors,² Mr Pratico said.

³Comparing the wider choice of processors in the eastern states with our limit of two, who in some regions operate as monopolies, emphasises the need for a negotiation body working for the producer.

"There must be a change or the WA dairy industry will not be sustainable and further dairy farmer exits will occur and regional communities will suffer.²

The report said domestic consumers were the winners, with the price for two litres of milk being lower than in 1999, the year before deregulation, and having dropped by up to 25c in some cases.



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