Australia-Dairy industry in trouble.

AUSTRALIA-PROBLEMS IN DAIRY INDUSTRY.

The Australian dairy industry is facing a horrible start to the year, with a loss in income of around $200,000/year for individual dairy farmers with a 300 cow herd.

As such Shadow Minister for Agriculture, John Cobb, is calling on the Rudd Government to ensure the 11 cents per a litre levy on milk set to expire on February 22 is passed back to farmers and consumers.

"I am extremely concerned that the 11c/l levy which was placed on fresh milk sales in Australia to help the industry adjust to deregulation will be swallowed up by the retail sector," he says.

"In that case, neither the consumers nor the farmers will see any of it."

The Australian dairy industry, he points out, is facing a horrible start to the year, and so needs all the help it can get.

Some of the nation’s largest dairy processors are slashing the farm-gate prices to dairy farmers by up 40pc, following the collapse of milk product export markets.

That’s a loss in income of around $200,000/year for individual dairy farmers with a 300 cow herd.

"Victoria has to date been the hardest hit as it is the nation’s largest exporter of dairy products," he says.

"It is the export market that has been hit very hard because buyers are unable to access credit.

"However, the Rudd Government is set to compound the current dairy industry problems by scrapping a critical 40pc rebate on AQIS export certification costs, worth at least $35 million a year.

"On top of this, the dairy industry will be particularly hard hit by the Rudd Government’s Emissions Trading Scheme, with initial estimates showing the ETS will cost the individual dairy farmers upwards of $12,000 a year."

Mr Cobb is also scathing of the European Union’s decision to re-establish an "intervention" or floor price - of $US2909 a tonne for butter compared to the current global price of $US1800-$2000 a tonne, with a similar premium on milk powders.

"European dairy traders will also be able to apply for an "export refund" from the commission to cover the shortfall between the domestic intervention price and what they receive in the global market for butter, cheese and milk powders.

"Analysts fear that given the EU supplies a third of the world’s dairy exports, the global price will now be capped at the EU domestic price minus the export subsidy.

"The EU likes to pretend that it is doing something about poverty and global food security, yet it is the EU’s policies and agricultural subsidies which have been identified as a major reason for the appalling poverty in many African, South American and Asian nations."