David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

I rise to highlight the plight faced by dairy farmers in my electorate of Lyne and across the nation. At the moment our dairy farmers are operating, in many places, under drought conditions. That is putting up their input costs considerably. The costs of feed, water and all the things that go into producing a quality product rise, but the price that they are being paid doesn't match that. In the current framework, there is an unequal power arrangement. The producers have little bargaining power because they have a perishable product. Exclusive, long-term supply agreements are limiting their ability to trade with more than one processor. Long-term penalties apply if they try to move.

Last year, we started consultations into developing a mandatory code of conduct that would define and limit a lot of the exclusivity and the restrictions on getting a fair contract price. We also to need work on a milk price index that is real and includes reference to international processing costs and international retail margins. The major supermarkets who control the market and control the processors, who then influence the deal that producers get, need to change their behaviour. The dollar-a-litre milk, as a loss leader product to get people into supermarkets, is not a fair deal.