When The Land produced the feature, Growing our Future, one of the clear messages from a number of the young farmers involved was the majority of them were only able to get into farming because their family’s existing farm was big enough for them to either come home to, or to spread the cost of extra land across.
Almost none of them, if any at all, had been able to buy in alone. This same issue popped up again at this week’s Australian Competition and Consumer Commission’s public forum for dairy, held at Taree, where the status quo was labelled as unsustainable.
Late last year we saw Murray Goulburn and Fonterra slash their milk prices and make farmers pay back the difference, and we kicked off 2017 with Parmalat squeezing its northern suppliers.
Consumers are willingly paying more for water than milk. The prices for milk are not a reflection of supply and demand, but the bottleneck of processors who have got hold of that cow by the teats. The $1 a litre campaigns of the big supermarkets have a lot to answer for, but the light also needs shining on how the processors come to their prices and the lack of options for farmers in negotiations.
How can a farmer plan for how many cows they can milk and what they can afford to feed? What’s the point of locking in on a feed grain, hay or supplement prices for a season if the price of milk it was based on could suddenly drop? The model is wrong. The bottleneck of processors is biting the hand that feeds it and seems to be answerable to nobody.
How can an industry invest in its future if two or three years into spending on new infrastructure farmers find the income upon which the loans were based plummets?
Unlike the weak political will from Abbott’s Coalition when it backed down on the compulsory supermarket code of conduct, the government needs to show some backbone and back farmers when the recommendations from this inquiry are handed down.
NSW Farmers’ suggestion of a more transparent price reporting system, such as that used in Ireland, would be a good start.
However, given the impediments to farmers in exercising the supposed competition that exists, it seems a mechanism such as a minimum farm gate price would also be essential as a base to bargain from to balance the lack of practical options presently available.
