Advanced Search

Share Coverage



Category: Government and Politics / Federal Elections / Business, Economics and Finance / Rural

Australian dairy farmers' half-a-billion-dollar lifeline

Tuesday, 24 May 2016 22:21:26 | Lucy Barbour

milk supermarket price war generic dairy farmer (Mick Tsikas: AAP)

Australian dairy farmers will benefit from a half-a-billion-dollar lifeline, Deputy Prime Minister Barnaby Joyce has announced this morning.

Key points:

  • $555 million of concessional loans on offer
  • Farmers can borrow $1m or half of what they owe, whichever is lesser
  • $2m to set up commodity milk price index, $1m for more financial counsellors

The $555-million package in concessional loans will be on offer for dairy farmers affected by recent milk price cuts.

Victorian and Tasmanian dairy farmers were left hundreds of thousands of dollars in debt after Australia's largest dairy processor Murray Goulburn and New Zealand processor Fonterra unexpectedly slashed prices within a week of each other.

The Agriculture Minister made the announcement at a dairy farm in Tamworth, in his NSW seat of New England.

"The concessional loans will go as low as 2.66 per cent. They're currently at 2.71 per cent." Mr Joyce said.

"Farmers will be able to borrow $1 million or half of what they owe, whichever is the lesser, so that they can assist themselves to get through this crisis."

The loans will be available to recipients for up to a decade and will be funded by expanding the current drought concessional loans scheme to include criteria specific to dairy farmers.

Price cuts a result of 'supply and demand': Fonterra

But farmers have been critical of that approach in the past, with concerns over delays in rolling out such funding and the management of such a scheme.

The Federal Government will also allocate $2 million to set up a commodity milk price index and provide almost $1 million for to fund an additional nine rural financial counsellors in Victoria, Tasmania, South Australia and New South Wales.

Demise of the dairy industry


Murray Goulburn and Fonterra were locked in a race to the bottom that pushed dairy farmers to the brink. It's a long road back for the co-ops hoping to rebuild trust, write James Lockhart, Danny Donaghy and Hamish Gow for the Drum.

Murray Goulburn said the price drop was due to unfavourable changes in the exchange rate, lower-than-expected adult milk powder sales in China, and a downward revision on the value of the milk supplies it currently holds.

It cut its $5.60-per-kilogram price for milk solids, and now expects to pay between $4.75-$5.00 per kilogram — a drop of about 10 per cent.

Fonterra Oceania managing director Judith Swales said in a statement the price cut was the result of a "supply and demand imbalance" and a strengthened Australian dollar.

The company's cut will see prices fall from $5.60 per kilogram of milk solids to $5.00.

For some dairy farmers, the price cut meant the loss of two years' profit in one day.

Mr Joyce said the support package was a bipartisan position between him and shadow agriculture minister Joel Fitzgibbon

AustraliaPlus


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend