Question: Review of Dairy Industry

Mr PURCELL (Western Victoria) — My question is also to the Minister for Agriculture, and I look forward to the minister's briefing on the dairy industry, as the south-west dairy industry underpins economic success and is critical to Australia's agriculture sector. Producing more than a quarter of the country's milk and delivering a third of the region's economic activity, it employs some 6000 people in our region alone. The industry has recently been devastated by savage price cuts and is currently on its knees. At a meeting held in Terang earlier this month, attended by 700 farmers, I committed to seeking support for the farmers' no. 1 priority, and I ask the minister: will the government conduct a thorough review of Victoria's dairy industry to include transport, power and the complete supply chain from the farm gate?

Ms PULFORD (Minister for Agriculture) — I thank Mr Purcell for his advocacy on behalf of dairy farmers in the south-west. We have in Victoria some 4300 dairy farms providing income and employment to around 10 000 people and a similar number again in dairy processing across the state. Mr Purcell talked about the economic impact in the south-west, but just for the benefit of members in the house — and I know there is a great deal of interest across the Parliament and in the Victorian community about this — when you consider the total impact of the dairy industry on the Victorian economy it is an $8 billion-a-year activity. It is very, very significant. It makes up 80 per cent of Australia's dairy exports, and it really does sit at the heart of Victorian agriculture and is disbursed in close to equal parts across three regions: in Gippsland, in northern Victoria and in the south-west.

Earlier today I made some announcements that are the result of three weeks of very intense work by the Dairy Industry Taskforce that I convened in the week following Murray Goulburn's announcement. These will certainly go some way to providing some of the support that dairy farmers need in the immediate sense, but I think it is important to stress that it is very early days in us dealing with this issue, and we will continue to work very closely with dairy farmers. I have had many, many conversations with United Dairyfarmers of Victoria and Adam Jenkins, and I commend him for his very strong leadership during what has been a very difficult period, but also Dairy Australia, the Gardiner Foundation and other players in the industry who have come together to develop an industry response, to which we have added a funding contribution from the Victorian government and additional mental health services support that the Premier announced on Friday.

This is an issue that, I think, will be facing us for two to three years and is influenced by and comes together as a consequence of a whole lot of different things — some a bit closer to home that are the subject of other inquiries and investigations, others from literally the other side of the world.

On Mr Purcell's specific question about an inquiry and some of these questions that people want answers to, my focus to date has been about making sure our farmers have the most immediate support that they need — mental health support and advice to make the business decisions that they need to make. That has been our focus in the first few weeks. It is worth noting that the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission are both undertaking investigations into this. The commonwealth government and the federal opposition are also in dialogue about the kind of federal government response that can be put together while they are in caretaker mode, and I certainly wish Barnaby Joyce and Joel Fitzgibbon the very best in finding a meaningful solution to support Victorian dairy farmers.

There are a lot of unanswered questions, and I certainly think that there is a place for an inquiry and a Victorian government-established inquiry. I would look forward to the opportunity of canvassing these issues — perhaps in the MPs meeting — in more detail. I am sure Mr Purcell and I will continue to discuss these matters, but I think it is important that we tread carefully so as to make sure that our efforts are focused on identifying real and practical solutions for Victorian dairy farmers and focused on areas of state government capacity to control and influence.

Mr PURCELL (Western Victoria) — I thank the minister for her reply, and I do not think it was a yes or a no; I think maybe was the answer. The minister did go through to say that it is an $8 billion industry, which is a huge industry in the country. The impact on the dairy industry of the price reductions in the south-west alone is about $330 million, and it is believed it could impact something in the order of about 850 jobs in the next 12 months. So my question is: what action plan does the government have to immediately support the broader south-west region, which will lose that $330 million and potentially 850 jobs from that dairy industry?

Ms PULFORD (Minister for Agriculture) — I thank Mr Purcell for his supplementary question. On the economic impact, Mr Purcell is absolutely correct: this is a very, very significant issue facing many, many communities across the state and in the very first instance 80 per cent of our 4300 dairy farms and the people whose incomes are derived from those places, and very shortly thereafter the small businesses that support them. Agriculture Victoria and Regional Development Victoria are doing a lot of extensive modelling to properly understand where these impacts are going to be most profound, because it will vary from region to region. For instance, there are some areas where farmers on the whole are carrying a greater debt-to-equity ratio in their businesses. These kinds of things are things that we are working hard to understand. Each business is slightly different.

I do not have time, according to the clock, to detail the action plan, but it was spelt out in a media release that was issued by the Premier earlier today. It is on Facebook, Twitter and the Agriculture Victoria website, and I undertake to provide the details of that by email this afternoon to all members of the Parliament.

 

LINKS:

Premier Media Release - 20 May 2016

Premier Media Release - 24 May 2016