House of Representatives

Dr HAINES (Indi) (19:40): The dairy industry is one of Australia’s most important agricultural sectors. Each year 5,700 dairy farms produce 8.8 billion litres of milk, employing 46,200 people and generating around $3.2 billion in export income. In northern Victoria 1,100 dairy farmers produce almost 20 per cent of Australia’s milk.

I know this sector very well. I grew up with my brothers on our parents’ dairy farm in Eurack, in south-west Victoria. My oldest brother and his wife continue to farm there, but, faced with uncertainty, rising costs and static milk prices, 11 years ago they moved from dairying to beef production. There are thousands of farming families in the regions who face these same challenges.

In Indi the 2019-20 year has been a dramatic one for our local dairy industry. After years of drought the Black Summer fires devastated huge parts of the Upper Murray, wiping out over a third of the agricultural land and thousands of stock in Towong shire alone. The 190 farmers in Towong shire, many of them dairy farmers, were directly impacted by fire and have now accessed bushfire recovery support. The pandemic and the closure of the New South Wales border brought their own challenges. Many farms along the border were unable to get their workers who lived north of the Murray to work. Many others rely on seasonal migrant labour, which has all but dried up, and now face critical workforce shortages. The difficult start to the season led to a 47 per cent increase in the quantity of purchased feed per milker on the milking area.

The one significant bright spot this year is that strong rains have brought an absolute bumper season. In northern Victoria herd sizes are up five per cent. Milk solids sold per cow are up eight per cent. There has been a 16 per cent increase in the average milk price, and 90 per cent of the farms surveyed by Agriculture Victoria reported a positive return on total assets up 40 per cent from last year.

But the outlook for the dairy industry in Australia and in Indi is indeed difficult. The industry is undergoing a significant restructure. In north-east Victoria the failure of Murray Goulburn Co-operative that began in 2016 had a serious impact on farmers, communities and our confidence in the Kiewa, Ovens and King valleys. Just last week Bega bought Lion Dairy for half a billion dollars. These huge shifts are part of a broad trend towards corporatisation of the dairy sector that raises huge challenges for family owned farms.

These huge challenges have been met head-on by one particular community—our community in the Alpine Valleys who have created their own cooperative, Mountain Milk. I pay tribute to the chairperson of that group, Stuart Crosthwaite. That group are committed to their cows and to the environment. The nature of dairy in the north-east valleys depends on family farmers such as those in Mountain Milk, because the physical presence of the valleys makes it hard to reach corporate scale. This means our local dairy farms are having to compete against massive corporate operations. On top of that, the outlook for trade with China both in dairy products and dairy heifers is obviously uncertain. The CSIRO projects that spring rainfall may decline in the Ovens Murray region by 36 per cent—all of this in an environment where the milk price has barely moved in years and where costs increasingly outstrip revenues.

In 2019 the National Dairy Farmer Survey showed that just 270 among 800 farmers felt positive about their industry’s future. This was the sixth successive survey revealing declining sentiment in most dairy regions. The Australian dairy industry is the best in the world and we cannot let it wither. I believe the consultations held by John Brumby will play an important role in building a profitable, confident and united industry. In September, after a nationwide collaboration involving more than 1,500 farmers, processors, retailers and investors, Mr Brumby published the Australian Dairy Plan. That plan aims to reform the sector to increase profitability, produce an extra one billion litres of milk and restructure the dairy sector’s organisation.

I know that some dairy farmers are sceptical of the process or have lost faith entirely, but if we are truly to transform Australian dairy into a sustainable and profitable industry now and in the future then we need to come together in good faith to implement a comprehensive strategy. We need government to come to the table on making sure purchasers are paying a fair farm gate price. We need to do all we can to stabilise the climate and support our dairy farmers to adapt to the changes that are locked in. Dairy is the lifeblood of so many communities in regional Australia. We must do all we can to make sure it stays that way.

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