Milk will be transported from Brisbane to far north Queensland hospitals after Queensland Health ended a supply contract with Atherton Tableland milk processor Lion Dairy.
The awarding of the contract to Parmalat Australia has added insult to injury for dairy farmers in the far north, who are already having to pay freight costs on excess milk they produce.
James Geraghty, a Millaa Millaa farmer and councillor for the Queensland Dairy Farmers Organisation, said any milk that could not be sold by Lion Dairy locally was sent south at a cost to farmers of 25 cents per litre.
“We’re going to freight milk from here to Brisbane because it’s not being sold here,” he said.
“At the same time milk is freighted into the Rockhampton Parmalat factory from Brisbane and then freighted north.
“The trucks that are going south from here will meet and pass the trucks that are coming north from there, so it’s just a ridiculous situation.”
Mr Geraghty estimated the loss of the contract would add 300,000 litres to the excess milk in the far north that must be freighted south.
Member for Dalrymple Shane Knuth said the deal had been signed off on without any consultation.
“There’s probably up to or even more than $300,000 of contract that has been lost, which was previously delivered by Lion and the Tablelands dairy farmers,” he said.
“This is very significant, and the sad part about it is we don’t have the support from the local government departments.
“I have indicated to the Cairns and Hinterland Hospital and Health Service that we are all ropeable.”
Government looking into issue
Mr Knuth said he was due to meet with Queensland Health Minister Cameron Dick to discuss the issue.
“They are now prepared to look at the legal aspects of this, of pulling out of the contract,” he said.
However, Mr Dick told an estimates hearing that while the matter was being investigated, he could not become directly involved in contractual disputes.
“We are trying to ascertain to what extent the contracted supplier is using local producers,” he said.
“If I were involved in contracts, I am sure others would refer me to the CCC or the Queensland audit office for direct interference.”
Mr Geraghty said if the contract could not be revoked, there could be other options.
“Parmalat have the contract, but if they can do a back deal contract with Lion in Malanda, Parmalat gets a cut, Lion gets a cut and there’s no freight going south or north, and the farmers here keep getting the payment that they’re getting,” he said.
“Failing that, if everybody bought an extra bottle of [local, branded] milk there would be no oversupply.”
The Atherton Tableland was once one of Australia’s strongest dairy regions and boasted 220 farmers before deregulation of the industry in 2000.
There are now just 48 dairy farmers remaining.
Lion Dairy and the Cairns and Hinterland Hospital and Health Service have been contacted for comment.
Source: ABC Rural