SHADOW Agriculture and Food Minister Mick Murray has called on the Australian Competition and Consumer Commission (ACCC) to hold an inquiry into the dealings of milk processors in the wake of WA's unfolding dairy crisis.
This comes as anecdotal reports have surfaced, claiming some of WA's major processors may have engaged in anti-competitive behaviour by trading milk internally with each other as a means of artificially deflating the market price.
This comes after a rocky few months for the dairy industry, with at least nine dairy farmers in recent months told their supply contracts will not be renewed - with some set to have nowhere to sell their milk as early as September 30.
Mr Murray said the behaviour of dairy processors had come to his attention by the industry, which prompted a request for the ACCC agriculture enforcement unit to investigate if there were any substance to the claims.
"I have received unconfirmed reports that processors may have been trading milk between one another to bring down the market price and ultimately undermine farmers," Mr Murray said.
"I wrote to one of the senior members of the ACCC's agriculture team to look into that and whether any other unconscionable behaviour may have taken place - and hold an inquiry if warranted."
Mr Murray said he would continue to put pressure on the State government to provide assistance to farmers.
WAFarmers Dairy Council president and Dardanup farmer Phil Depiazzi told Farm Weekly this was the first time he had heard such claims.
"I know very little about the background and the reasoning behind the request.
"Until we know more we are reluctant to comment further."
Mr Depiazzi said WAFarmers was working with processors and dairy farmers to resolve the issue of finding somewhere for farmers to sell their milk.
"We need to address this issue," Mr Depiazzi said.
"Further work needs to be done, but I am hoping all parties can co-operate to find a long-term solution, but the short-term issue needs to be addressed and quickly. We need to ensure they have a choice, as to whether they continue to milk cows or not - we don't want to see anyone forced out of the industry."
Mr Murray said he had been in regular contact with many of the affected farmers and other people whose businesses spin off the dairy industry.
"The State government should be looking to help ease those immediate financial pressures and provide access to mental health services for farmers if necessary," Mr Murray said.
"It would be remiss of me if I didn't follow this claim up."
Mr Murray said there were longer term issues of opening up more of those new markets.
"I question why that has not happened more quickly and why we are now playing catch-up with millions of litres of milk with nowhere to go," Mr Murray said.