Dairy farmers say they are disappointed Queensland’s largest milk processor has likened the sunshine state’s industry to trying to grow ‘bananas in Victoria’.
In a submission to a Queensland State Government inquiry into the Sustainable Queensland Dairy Production (Fair Milk Price Logos) bill, Parmalat, has outlined its opposition to introducing a fair milk price logo.
In the written statement chief executive Craig Garvin criticised the mindset of Queensland dairy farmers, saying they expect consumers to only drink milk produced in the state, and to pay a premium to do so.
“Imagine if that same mindset was applied to bananas and that Victorians should only eat bananas grown in Victoria and Victoria choose to establish a fair price for bananas that encouraged banana production in Victoria,” Mr Garvin said.
Banana comparison rejected
The comments have angered producers like Mary Valley farmer and industry representative, John Cochrane.
“They make some references to bananas in Victoria, where are these people coming from?” he said.
“I thought these people would have known that our customers love fresh, local, quality product and the sooner you can get it to the factory and the sooner you can get it in the bottles and on the shelves, the better the shelf life.
“Do they really think (customers) really want milk that’s been banged 1,600km all the way from Victoria?”
Parmalat’s submission was that the sub-tropical climate in Queensland was less than ideal for dairy cows, and that the state government should question if Queensland milk production was ‘so essential’ it warranted government assistance.
Dairy in Queensland ‘more difficult’
Mr Cochrane admitted it was more difficult to produce milk in the warm state, but he believed it was servicing the market.
“It can get very hot here and very difficult, but it doesn’t change our customers,” he said.
“They still want that good quality fresh food on a daily basis so we have to work harder to make sure we have a very good quality product on the shelves.
“And it is hard to dairy in Queensland … but we have to respond to our market which is a daily market, not a world market that requires powder.”
‘Fair price milk’ seen as price regulation
There is a shortage of supply in Queensland, and Mr Garvin said Parmalat could import milk from Victoria for less than 62 cents per litre, effectively capping an economic farm gate price.
“For many farms this market reality has not provided sufficient income to cover their mode of dairy operations,” Mr Garvin’s submission said.
The bill would establish a voluntary logo that identified on the bottle where milk came from, and if the farmer received a fair price.
“Any ‘fair milk price’ system supported by government legislation that seeks to promote a farm gate significantly above the market-established benchmark is little more than exercise in quasi re-regulation of farm milk price,” he said.
“Such re-regulation should be resisted as over $1.74 billion has already been paid in compensation and Queensland consumers alone have paid out via the dairy support levy circa $380m over the eight-year period to enable the industry to transition to a deregulated existence.”
He said the company was firmly against the logo.
“Parmalat believes that such a scheme is a step-back to a quasi-regulated state-based farm gate milk price that has no place in a modern competitive national market,” Mr Garvin’s submission said.
“A fair price logo only perpetuates a protectionist mindset of a regional industry that appears uninterested in being nationally or even international competitive.
“That mindset is not found in Queensland beef, tropical fruit or grains sectors all of whom are thriving as nationally and for some globally competitive agricultural industries.”
Change in attitude
Mr Cochrane said the submission represented remarkable change in attitude from the company.
“I thought these people were in the dairy industry,” he said.
“Over the years they have claimed to be leaders and they have been. This is a real change of direction.
“There seems to be a complete change in management that’s not recognising the value of local businesses and jobs and quality of product.
“We’ve got an international company here that is focussing on profits and expects to deliver something that in my opinion our customers don’t want.”
The now French-owned company, which through the Paul’s brand can trace its roots in Queensland to the 1920s, is the state’s largest milk processor.
It is currently in arbitration with its Queensland’s suppliers, about 200 farmers represented by Mr Cochrane, to determine a price for this year’s milk contracts.
In the submission, the company said the consumer would be the final arbiter of any fair price system, noting that consumer purchasing behaviour was driven by price.
Customers will make the choice
Mr Garvin said the recent shift towards premium brands off the back of the pricing crisis only lasted four to five months before sales of cheap milk returned to their previous volumes.
But Mr Cochrane believes customers want to support local farmers.
“The customers will have the say at the end of the day without any doubt whatsoever,” he said.
“They have a choice at the end of the day whether they buy a quality food from local people or they go the dollar-a-litre milk.
“In general, if they can afford the quality product locally, I’m sure they will buy that.”
The Agriculture and Environment Committee Inquiry into the Sustainable Queensland Dairy Production (Fair Milk Price Logos) Bill 2016 is due to report to State Parliament on April 13.