Primary Industries Minister Niall Blair vowed if the Federal Government wouldn't "step up" in supporting the dairy industry then he would at a state level.
And today he will stand by his pledge by announcing in Coffs Harbour the appointment of a fresh milk and dairy advocate to lead a dedicated dairy business advisory unit within the Department of Primary Industries.
It comes after the NSW parliamentary inquiry into the sustainability of the dairy industry in NSW released its report on December 13, 2018, recommending that the NSW government immediately establish and fund an independent NSW commissioner for dairy.
"We had to go it our own at a state level because dairy farmers are not getting the support they need … and we need to make sure the industry survives," he said.
Dairy Connect chief executive Shaughn Morgan, who has pushed for a dairy commissioner, said: "The position needs to be independent of government to provide advice that will ensure the survival of milk production in NSW, which is a fresh milk state."
Last month when Mr Blair was at a pre-election forum at Wingham - the same day he announced the agricultural commissioner - he promised to raise the issues with his state and federal agriculture counterparts and "if they don’t step up, we will go our own".
Two weeks ago Federal Agriculture Minister David Littleproud said at a Kempsey dairy that Mr Blair had urged him to look at doing it federally and he was "exploring the opportunity to do that".
"We wanted to see something at a federal level particularly around the mandatory code but now that looks like its going to be pushed out," Mr Blair said.
The advocate’s first order of business will be to establish and co-ordinate a fresh milk crisis taskforce, with both industry and government, to identify immediate and necessary actions for the sector.
They will champion the cause and work with the agriculture commissioner to bring processors, retailers and farmers to the table to talk about the issues affecting the industry.
"I have met with dairy farmers, processors and retailers. All have different challenges but they share one clear message - that there is not enough profitability in the whole dairy supply chain,” he said.
The advocate will also work with dairy farmers by utilising expertise within the DPI to help reduce input costs.
Mr Blair said it would also focus on the long-term future by working with industry to drive the demand for NSW milk through a marketing campaign, as well offer fully subsidised course fees for the NSW Dairy Farm Training Program to support the next generation of farmers.
"I see people are prepared to pay $4 to $4.50 for a cup of coffee yet they are still only prepared to pay $1/litre milk.
"I have stood in China and watched people pay $12/litre for NSW milk because they value the product. They know what it's like to have concerns about food safety.
"We have become so accustomed to paying $1 for a litre for milk because we think that’s all it’s worth.
“The simple truth is it costs farmers money to produce milk, it costs processors money to process milk and costs retailers money to stock milk, yet we’re not paying enough to cover those costs and dairy farms across the state are collapsing as a result.
"When our farmers are no longer able to produce fresh milk and it’s being imported from interstate or overseas, the retail price of milk will skyrocket, leaving supermarkets with an unaffordable product and a reputation permanently tarnished by having destroyed the dairy industry in NSW.”
NSW Labor leader Michael Daley has committed to establishing a dairy and fresh food pricing advocate with a dedicated unit to investigate and report on contracts and prices across the dairy and fresh food supply chain.
This advocate would also work with the sector to find opportunities for collective or co-operative arrangements between producers, processors, wholesalers and big retailers.
NSW Shooters Fishers and Farmers Party member Robert Borsak said it would also support the establishment of a stand-alone commissioner for the dairy market or any other position with delegated powers that would have the interest of the industry at heart
Snapshot of NSW Liberal and Nationals election commitment
- Establishing an agriculture commissioner
- Appointing a fresh milk and dairy advocate and establishing a dedicated dairy business advisory unit within DPI.
- Working with the industry to develop a ‘buy local fresh milk’ marketing campaign and undertake a targeted campaign overseas using the NSW Trade office network
- Offering fully subsidised course fees for the NSW Dairy Farm Training Program
- Maintaining a commercial dairy at DPI for research and training
- Reprioritising investment into key research areas identified as priorities by the industry
- Continuing to provide industry extension support services; and
- Extending access to the cattle underpass project
Ministers' letter to Coles
I am writing to you in your capacity as one of the 20 largest shareholders in the Coles Group/a director on the Coles Group board to seek your support for an end to the pricing of milk at $1 per litre in Coles Group retail outlets and supermarkets.
I am writing to you because I believe by pricing milk at $1 a litre, Coles Group is acting in a manner that is inconsistent with the long-term interests of both its shareholders and customers.
Arguably, Coles’ 2011 decision to lower the price of its Coles brand milk to $1 per litre has substantially contributed to a collapse in profitability and confidence in the dairy industry across NSW. When other supermarkets followed suit, $1 per litre became the benchmark for the value of milk across every other dairy category, undermining profitability across the dairy value chain.
I appreciate that the nuances of individual contracts and business decisions mean that none of the issues facing the dairy industry are ever as simple as they may seem. However, my discussions with parties across the value chain have led me to the belief that the contraction of the dairy industry in NSW can be substantially attributed to the ongoing sale of milk for $1 per litre at retail outlets.
These discussions have also led me to the belief that if there is not a structural change in the value of all dairy products, including and especially fresh milk, then there is a real danger that the NSW dairy industry may collapse.
I believe that the decline and potential collapse of the dairy industry in NSW represents a significant reputational risk to any business that continues to sell fresh milk for $1 per litre. At the date of writing, this includes Coles Group.
In addition, the collapse of the NSW dairy industry would deny Coles’ customers access to a safe, fresh and reliable product that they enjoy every day.
Woolworths recently took the step of increasing the price of Woolworths branded milk to $1.10 per litre. This small price increase will not solve all of the issues facing the industry, but it is a welcome step towards a healthier dairy industry.
The newly created Coles Group has a window of opportunity to leave behind what has been described an ‘acrimonious’ relationship with the farming sector and show leadership by putting the NSW dairy industry, and the dairy industry across Australia, on a more sustainable footing.
The power to set retail prices means that Coles has power beyond that of governments to act quickly to restore confidence, profitability and trust across all parts of the value chain, from farmer to processor to retailer. I urge you to, as a significant shareholder/director, to ensure they use that power.
My door is open to discuss this matter with you and any other relevant parties face to face. I have written to every one of Coles Group’s top 20 shareholders and to the company’s directors on the same matter.
Regards, The Hon Niall Blair MLC, Minister for Primary Industries, Regional Water, Trade and Industry