QUESTION: Future protections for Victorian Dairy Industry

Mr PURCELL (Western Victoria)  — My question goes to Minister Pulford, Minister for Agriculture. The demise of Murray Goulburn is the most important issue in regional Victoria in decades. Murray Goulburn, being the largest Victorian and Australian milk cooperative, has for decades been the price setter for dairy farmers. With the sale of Murray Goulburn to Saputo this will cease. So my question is: what is the minister doing to protect the future of the Victorian dairy industry and dairy farmers?

Ms PULFORD (Minister for Agriculture)  — I thank Mr Purcell for his question about Murray Goulburn. I think his introductory remarks are very much on the point. I think Murray Goulburn is perhaps the most significant business operating in regional Victoria for the many farmers who supply Murray Goulburn, all of the businesses that then in turn derive income from those farmers and the processing factories in three different dairy regions of Victoria. It has been an awful thing for everyone to watch the turmoil that has engulfed this once-great Victorian icon. I know that many of our farmers who have been shareholders have a very deep personal connection to the notion of this co-op.

Murray Goulburn has also historically served as the price setter for the rest of the dairy industry, but Murray Goulburn has not been the price setter lately. They have experienced real pressures in terms of their attractiveness to suppliers, which has further compounded the enormous challenges that the business has been facing. The situation at Murray Goulburn has been the subject of inquiries by the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission (ACCC). There have been some findings in relation to those, and I do not propose to add to them.

The government has been providing support to our dairy farmers in a package of many millions of dollars — I think a $17 million package — to support our dairy farmers through a period of significant price shock. Prices have now largely recovered — well, not completely recovered, obviously, but they have recovered to a point above the cost of production for most farmers, whereas what we had this time a year ago was people getting paid less than the cost of production. This was just a horrific situation for people to be in, as well as there being Murray Goulburn's decision to require a lower price to be applied retrospectively to the previous 11 months of the financial year and then for that to have to be carried as a debt by farmers. There have been subsequent decisions by Murray Goulburn to waive that liability held by farmers, and the new management at Murray Goulburn I think have been working hard to try and stabilise the situation.

Our dairy support package has been rolled out. There are elements of it that are still continuing to provide support to dairy farmers in each of the three regions. We have been —

Mr Ondarchie — Has it got FIRB approval yet?

Ms PULFORD — I was going to come to that. If Mr Ondarchie was as keen on agriculture as he was leading us to believe before, he would have noticed last week — when it was extensively reported in all the rural papers and in the business papers in the cities — that what Murray Goulburn's management have now done is that they have entered into a sale agreement with Saputo, which is a Canadian business. It is a family-owned business, a very significant player in the international dairy scene as well, and it has been here in Victoria for a while. They purchased Warrnambool Cheese and Butter a number of years ago, and I believe that has been quite successful. Warrnambool Cheese and Butter has been able to maintain a competitive milk price throughout this period.

I am just conscious of time, President, but quickly to respond to Mr Ondarchie, what was extensively reported was that the board has decided that a 50 per cent shareholder vote will be required to approve this arrangement. There will also be approvals required from the ACCC and the Foreign Investment Review Board (FIRB).

I have spoken about this to The Nationals candidate for New England, who was the Deputy Prime Minister at the time, but I have not spoken to the new agriculture minister. But also importantly, because it is FIRB and the ACCC, the Treasurer has spoken to Scott Morrison about this and we have certainly urged the federal government to expedite these considerations so that that stability and certainty everyone is looking for can happen as soon as possible.

Mr PURCELL (Western Victoria) — I thank the minister for her lengthy answer and also very good answer. Minister, it is being widely reported that you met with Murray Goulburn mid last month. Could you explain to the house whether the sale was discussed at that meeting and more particularly whether the proposal for the super cooperative with Fonterra was discussed and in what context?

Ms PULFORD (Minister for Agriculture)  — I thank Mr Purcell for his further question about my meeting last month with Ari Mervis, the CEO of Murray Goulburn. I actually met with Mr Mervis again on Tuesday of this week, so on both sides of this big announcement that they made. The basis of that conversation was that its contents would remain confidential. I have had a number of media inquiries and I have given them the same answer I am going to give you now. I am going to respect their confidence. Mr Mervis was quite candid. It was a good exchange of information. It has certainly been important to ensure the government has a very good level of understanding of these significant issues. I want to respect that confidence, but I can certainly assure Mr Purcell that, again meeting with the company this week, we are very, very engaged in this and I hope to meet with the proposed new ownership in the not-too-distant future. As for Mr Purcell's query about the notion of a super co-op, I will not add to that anything other than to say that to the best of my knowledge neither Murray Goulburn nor Fonterra are making any public comments about that, so I will not be either.