Minnister for Agriculture David Littleproud says the move to extend the 10c levy to dairy farmers was a tokenistic gimmick. Picture: Bev Lacey
Minnister for Agriculture David Littleproud says the move to extend the 10c levy to dairy farmers was a tokenistic gimmick. Picture: Bev Lacey

MP says milk levy continuing a ‘gimmick’

AUSTRALIAN dairy farmers marked World Milk Day on Monday with news of the continuation of the 10 cent per litre levy.

Woolworths will extend its existing dairy contribution payments on two and three litre fresh own-brand milk varieties until June 2021.

However, Agriculture, Drought and Emergency Management minister David Littleproud said this was little more than a tokenistic gimmick.

"It is utterly disrespectful of Woolworths to try to capitalise on World Milk Day with this pitiful offering, duping consumers into thinking the dairy farmers are getting genuine help from the supermarket," he said.

Woolworths Director of Fresh Food Paul Harker said their levy would provide much-needed relief to dairy farmers.

"While conditions have improved and farmgate prices have gone up since we started the levy in 2018, we're extending payments to provide certainty while dairy farmers and processors find their feet under the new mandatory code," he said.

"This is set to return tens of millions to dairy farmers over the next 12 months above and beyond the farmgate price they're paid by their processors."

Woolworths said the current 10 cent per litre levy has contributed around $50 million to dairy farmers since the company first introduced the initiative in 2018.

It is projected the support payments will contribute an extra $30 million to dairy farmers over the next 12 months.

The move to extend the support will provide certainty to more than 450 dairy farmers supplying milk used in the production of Woolworths branded milk as the Federal Government's Mandatory Code of Conduct comes into full effect and drives change in the industry.

The new code of conduct was one of the ACCC's key recommendations following the 2018 dairy industry inquiry.

From this week, processors will be required to publish their standard form milk supply agreements to cover all the circumstances in which they intend to purchase milk in the coming financial year.

Woolworths will also establish a $5 million fund to provide infrastructure and technology grants to dairy farmers to help improve on-farm efficiency and profitability over the next three years.

The company is currently engaging with dairy industry stakeholders on the design of the program and expects to open for applications later this year.

Mr Littleproud said they needed to shift their focus to restoring the value of milk.

"The supermarkets aren't listening to me or dairy farmers when we are clearly saying they need to restore the value they stripped from the dairy industry with a $1 a litre milk," he said.

"Ultimately, farmers don't want charity or to have to rely on grants, they just want milk to be priced at what it's worth."

Mr Littleproud said the dairy payments were only a corporate feel-good fund to promote their brand.

"Stop holding back the extra $90 million in value from the Australian dairy supply chain and claiming to be the dairy's saviour with $5 million of grants that farmers need to grovel for," he said.

"We just need fair prices for dairy farmers not tokenism."