Deregulation harms NSW dairy farmers

Almost three hundred NSW dairy farmers have stopped their businesses, unable to survive financially in a deregulated market, a new report has found, Industry Search reports. Loss of income from plunging farm-gate milk prices and uncertainty over the future were key reasons for exiting, the NSW Dairy Deregulation Impact and Assessment Committee report said. The eight-member committee was set up to look at the fall-out from the July 1 deregulation and make recommendations to the NSW government. Its interim report tabled in parliament this week followed state-wide meetings with farmers and milk processors. The committee, which included members from government departments and dairy and processing industries, said many farmers still in the industry were deciding whether they would stay. Deregulation had forced out 271 dairy farmers in NSW, leaving 1,454 supplying milk to processors, it said. The average return farmers received for each litre of milk had dropped by 20 per cent, from 53 cents to 28 cents. Federal government financial assistance schemes had been helpful but there was more catch-up to do before there would renewed confidence in the industry, the report said. "The overwhelming sentiment expressed by dairy farmers...is the need to increase the price they receive for their farm milk in order for them to remain viable,"​ the committee said. The committee recommended the industry seek ACCC approve to form co-operatives to gain a stronger negotiating position. The ACCC should also investigate whether processors and retailers were not misusing their market powers, it said. The report also called for the federal government to provide tax relief for farmers receiving funds from re-adjustment packages and relaxing assets tests attacked to assistance.