Struggling dairy farmers will be forced to repay loans from a Commonwealth $555 million rescue package at almost double the 1.5 per cent rate the federal government has accessed the funds.
Victorian Agriculture Minister, Jaala Pulford, has slammed the program after revealing local dairy farmers doing it tough since milk processors slashed farm-gate prices will be able to access only $30 million in loans this year, at a rate of 2.7 per cent.
She said the next five months are critical for the worst-hit dairy farmers and releasing only five per cent of the total funding is not enough.
The Labor MP revealed to ABC Radio that the deal cannot go ahead unless signed off by the Victorian Government because the state has been hardest hit by the milk crisis.
The Federal government’s loan package worth $555 million to help struggling dairy farmers has been criticised over its proposed interest rate for farmers and for not releasing more money this year
Victorian Agriculture Minister Jaala Pulford (left) has challenged her Federal counterpart Barnaby Joyce to release more loan money to impacted dairy farmers in her state and drop the interest rate they must pay
Fonterra and Murray Goulburn announced they would slash the gate-price of raw milk by up to 10 per cent in early May impacting farmers across Australia
‘What people have been offered here is a questionable line of credit,’ she told the ABC.
She said the Federal Government need to show they understand the pain of farmers and that they are taking the matter seriously.
‘I think dairy farmers are entitle to ask Malcolm Turnbull and Barnaby Joyce, ‘what’s the go here?’,’ she said.
Her federal counterpart, Barnaby Joyce, last month promised to make the money available at the ‘cheapest rates possible’.
But under the plan only $30 million will be made available to Victorian farmers, the worst hit after industry giants Murray Goulburn and Fonterra slashed the raw milk price by up to 10 per cent in May.
The cuts mean that in many cases farmers will have to repay hundreds of thousands of dollars because their milk did not sell at the same high price it was bought by processors.
Murray Goulburn co-operative was formed in 1950 and is Australia’s biggest dairy producer with 2600 dairy farmers
NZ-based Fonterra was founded in 2001 and is the world’s largest dairy exporter and has 1200 Australian dairy farmers.
A spokesperson for the Deputy PM told Daily Mail Australia that Victorian Labor had ‘sought to end the bipartisan commitment to provide dairy assistance’.
‘The Commonwealth has offered Victoria $30 million from the $55 million allocated to the Dairy Recovery Concessional Loans this financial year, as part of an interim response,’ she said.
‘The Commonwealth is making available a further $500 million in concessional loans over 2016-17 and 2017-18, from which further loan funds will be made available to Victoria.’
Ms Pulford revealed the funding deal cannot go ahead unless signed off by the Victorian Government because the state has been hardest hit by the milk crisis – she called it a ‘questionable line of credit’
Struggling Australian dairy farmers been granted access to just five per cent over the next five months from a total $555 million support package – a Victorian MP says it’s not enough at a critical time
Chloe Scott, 16, pictured on her family’s Boorcan dairy property in Victoria. The teenager revealed to Daily Mail Australia last month that mounting debts because of the milk price crisis had severely impacted her father Brendan’s business – he has since decided to end his 25 years in the dairy industry
‘Dairy farmers and their representatives have met with the Deputy Prime Minister in Victoria and said they wanted concessional loans – and the Coalition Government has delivered.
‘The interest rate for the Commonwealth Government’s drought concessional loans is calculated to be revenue neutral to meet the cost of borrowing and the costs of administering the loans scheme via the state governments.
‘The Commonwealth would be prepared to consider a lower interest rate if the Victorian Government was to forego administration funding.’
Canberra announced the support package announced last week, which will also include fortnightly allowances of $1000.
The government package also proposed $2 million to establish a commodity milk price index to allow for greater transparency and a dairy industry liaison officer in the Department of Human Services.
Mr Joyce said dairy farmers also wanted money on the table through the Farm Household Allowance.
‘That will allow a couple about $1000 a fortnight, this will keep the wolves from the door and the dignity in their house,’ he said.
With concerns over the stress and mental health of farming communities, $900,000 has been set aside to establish nine new counsellors across Victoria, Tasmania, South Australia and Tasmania.
Karen Ellul was among those to share a photo supporting dairy farmers on ‘Love My Milk’ Facebook page
LoveMyMilk Facebook page-shared this photo with the caption ‘Confused which products you should buy? Look out for these brands. Support dairy farmers when you buy your cheese, butter, cream, yogurt, milk Etc’
Consumers have been showing support for dairy farmers across the country by buying more expensive brand milk and leaving the cheap house brands on the shelf.
Retail expert, Dr Gary Mortimer, from Queensland University of Technology said supermarket wars aren’t helping the dairy farmers.
‘Shoppers have consistently and routinely been grabbing the cheap milk since January 2011 when the supermarket ‘milk wars’ first began,’ Dr Mortimer said.
Many dairy farmers have come forward to share their stories of hardship brought about by low milk prices.
Chloe Scott, 16, told Daily Mail Australia that she and her mother Melissa had been forced to move out of the family’s Boorcan home, leaving her father Brendan to work the property alone and deal with mounting costs.
But after 25 years the Scott dairy farm business in rural Victoria found the burden of increasing debts from its milk payment contract with co-operative Fonterra too much.
The teenage girl who became the voice of the dairy farmers last month revealed her father Brendan, a third-generation farmer, had made the ‘tough decision’ to leave the industry.
Moama, in the Riverina of New South Wales, also saw customers turning their backs on house brand milk
Residents in Wodonga showed support for dairy farmers by spending more on the brand milk.
Source: The Daily Mail
