Perin Davey (NSW, National Party) Share this | Hansard source

When I read in the paper that Senator Hanson had garnered the support of Labor to put this bill before the Senate today, I did what I do every time a relevant piece of legislation comes before me, I hit the phones, not to the Liberal Party, as contested by Senator Sterle and Senator Hanson, but to farmers, real dairy farmers, the farmers I know and the farmers they put me in touch with and others, because I wanted to know what the real dairy farmers think. Most of them said: 'We're writing our submission. Don't worry. We're going to let Senator Hanson know exactly what we think.' They were unaware that, despite the fact that submissions to the inquiry into the dairy industry have not even closed, Senator Hanson has determined that she is going ahead with this bill. They were horrified to think that the process of the Senate was being ignored and that their ability to contribute to our democracy was being undermined.

When I look at the history of regulation, I see that it dates back to the 1930s. Some people in this place look back with rose coloured glasses and say, 'That was Utopia,' but it was not. In the history of dairy regulation, there were allegations of corruption within regulating bodies. Multiple reform plans were put forward and refuted by industry and others. Then, in the 1990s, the industry commission found that Australian consumers were paying around $280 million more for fresh milk, and they recommended that the state controls be removed.

As a result, there was considerable commercial consolidation even before deregulation. From the 1940s to the 1990s, we saw our dairy herd fall by almost half, so to blame deregulation for all of the ills of the industry is rewriting history. As quite rightly put by Senator Rice, the catalyst of where we are now occurred 16 years after dairy deregulation. It was when Murray Goulburn dairy shocked the sector by announcing it would slash its farmgate milk price to below the cost of production. That was a devastating time. I live in one of the key dairy regions that provide Murray Goulburn and Fonterra with their milk in Australia. I watched friends, farmer against farmer. I watched friends who'd gone from being positive and planning on-farm investment to—overnight—facing huge debt and having to consolidate. But then I saw resolve. That move by Murray Goulburn shocked farmers, who were traditionally loyal to the core to their processors. After that, farmers realised that processors had no loyalty—therefore, why should they? And many started exercising their choice.

The result has been, since 2016, that farmers realise they can negotiate. It is not perfect yet, but that is why farmers support a mandatory code of conduct, and that is why the National Party have worked hard with the dairy industry to develop that code of conduct. It is the recommendation of the ACCC that we are following and it is the call by industry.

When I was talking to the farmers I wanted to explore the range of opinions. I spoke to farmers from my area, in the Murray dairy region; in the northern Riverina, around Wagga; in the Bega Valley; in Gippsland; and in Western Australia and other states. Not one of the farmers I spoke to said they wanted a floor price. They all said they want a fair price. That's not a floor price. A floor price is not a prerequisite to a fair price. The fear for many dairy farmers I spoke to is the impact the floor price will have on the market. If the floor price is set too high, Australia will become a net importer of cheap foreign milk products. And that would devastate our industry. On the flipside, if the floor price is set too low, there will be no requirement for processors to negotiate, no requirement for processors to pay any more, and it would effectively prevent farmers from being able to negotiate a price that suits their business.

The other thing is that Senator Hanson's bill does not include a change to the definition of a processor. So non-processing businesses, like Coles and Woolworths, that purchase milk from farmers would still not be covered by the bill. It also doesn't deal with the issue of the different arrangements in place with processors regarding fat, bacteria and the protein content of their milk. It is not clear how the ACCC will determine a standard composition for milk, for each region, given the variability in operations.

I am told by dairy farmers across the board that they are all different. They all have different business models and they need the flexibility to negotiate a price that suits their business model. Therefore, a proposal by One Nation to set a minimum farmgate price is not in line with industry recommendations as outlined by either the Australian Dairy Farmers or the National Farmers Federation, nor is it in line with any individual dairy farmer I have spoken to. This proposed bill would set a minimum farmgate price that would not take into account that variability. It would allow processors to become lazy in their dealings with farmers, and it would not resolve the key issue. The key issue for dairy farmers is input costs. Energy prices are crippling. The cost of fodder during this drought is crippling and, for irrigated dairy farmers, the cost of water on the temporary market is crippling. None of these issues will be addressed by this bill.

That is why the Nationals, who are committed to the dairy industry and who do want to work with our dairy industry to ensure their continued success, are committed to passing today's 'big stick' legislation to bring down power price bills. That is why we are committed to bringing in this mandatory code of conduct, so that dairy processors and dairy farmers know where they stand. And maybe the Nationals are prepared to look at the Food and Grocery Code of Conduct, which is currently voluntary, to see if we need to get tougher with the retailers, to make sure they pay a fair price for our food. We in the National Party do stand by our dairy farmers. We believe in them and we want them to succeed. We will not force on them a bad policy that they do not want.