$1.8 million in funds collected from the Woolworths Drought Relief range has flowed through to 289 dairy farms in eastern Australia over the past few months.
Woolworths was the sole supermarket retailer to impose a levy on a select range of milk products; ten cents a litre was added to a limited range of two and three litre milks.
The second of four payments was handed directly to farmers struggling through prolonged drought, water shortages, higher energy costs and a farmgate milk price that has stagnated since the industry was deregulated at the turn of the century.
Fourth generation Avoca dairy farmer, Greg Schofield, said he gave credit to Woolworths for providing direct support to its suppliers, rather than an application model which delays funds going to farmers.
“There’s been no cash in the industry, people are either dipping into their superannuation funds or refinancing and taking out more loans. We’ve really got to thank Woolworths for taking the initiative and proving that it can be done,” Mr Schofield said.
Dairy Connect CEO Shaughn Morgan, who was a member of the independent drought relief committee that oversaw the distribution of the funds, said he received positive feedback from the industry, but more needed to be accomplished.
“I’ve spoken with a number of farmers in the Southern Highlands and they’ve told me it has helped pay for fodder and provide that extra bit of resources needed,” Mr Morgan said.
“We’re continuing discussions with Woolworths and we’re very keen to demonstrate how important it is for the range to continue for at least another six months.”
The Drought Relief range was slated to wrap up by the end of January 2019, but Mr Schofield said this would be premature as it would take months, maybe years, before the dairy industry would be on its feet again.
“We need 30mm rain every week just to get the grass going, let alone replenishing our dam. We’re back-paying bills from the last year, but we’re forward-paying grain, seed and fertilizer,” he said.
There were about 1000 dairy farms in Australia in 2005, by the end of the 2017-18 financial year, that number had fallen to 626, according to Dairy Connect.
Whether you’re buying $4.50 or $1 brand of milk, the same amount of money is flowing down to the farmer.Shaughn Morgan, Dairy Connect CEO
Mr Schofield’s said dairy production at his farm was down 25 per cent, a number consistent with other dairy farmers he had spoken to.
“A lot of the people I speak to; they’ll be lucky to last to the middle of next year if things don’t turn around,” he said
Drought conditions have exacerbated already untenable circumstances. The farmgate milk price has stagnated since the industry was deregulated, while above average rainfall has become less reliable and droughts more intense.
“All that the drought has done is bring these problems forward. This would have all happened in another three or four years' time because our price has been too low,” Mr Schofield said.
With both state and federal elections coming up next year, Mr Morgan said he hoped the industry would be able to put forth suggestions.
A priority would be an industry-wide code of conduct which was one of eight recommendations made in an ACCC report into the dairy industry that was released earlier this year.
The federal government has signalled it would support the code and opposition has echoed that support.
“Milk supply agreements are very one-sided, it is vital to restore transparency and balance. A code of conduct would help create a balanced, fair and transparent playing field,” he said
“At the moment, whether you’re buying $4.50 or $1 brand of milk, the same amount of money is flowing down to the farmer.”
Mr Schofield said long-term solutions would need to be sought by farmers, processors, retailers and the government to secure the future of the industry and encouraged Woolworths to continue the drought relief range in the interim.
“The truth is, we need that extra 10c, not only on a limited range, but across the full range of milk and dairy products. It’s got to go across the whole dairy industry.”
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