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Dairy industry body calls on government to impose levy

National dairy industry advocacy group Dairy Connect is calling on government to consider a dairy levy to support local Australian farmers.

In 1999, the Howard Government implemented the Dairy Adjustment Levy that imposed 11 cents per litre on dairy beverages, which ran for more than eight years.

Late last year, ACCC chairman and professor Allan Fells called for the reintroduction of a retail levy of 11 cents per litre for fresh milk, and last week Victorian businessman John Dahlsen sought government support on a 40 cents levy on milk in supermarkets.

“While it may be preemptive to arbitrarily impose a ‘40 cent a litre’ levy on retail milk, we need to ensure the sustainability of Aussie dairy farms, both now and into the future,” said Graham Forbes, president of the Dairy Connect Farmers Group.

“A levy of some form needs to be at the forefront of consideration by government and dairy industry players within the dairy value-chain, especially given the strong support of supermarket customers for the continuation of a strong and vibrant Australian dairy industry. We must not allow overseas dairy imports to replace natural dairy produce and nutritious fresh milk.”

Woolworths was the first retailers to stop selling A$1 per litre milk as the Australian drought worsened last year, and Coles and other supermarkets followed suit.

“It is vital that steps be taken immediately to stop the exodus of dairy farmers from leaving their dairy farms. The proposal suggested by John Dahlsen that up to 40 cents per litre be added to the retail price of fresh milk and an ‘independent entity’ would collect this revenue and pay it back to farmers, needs to be given urgent consideration,” Dairy Connect CEO Shaughn Morgan said.

Morgan said that federal agriculture minister David Littleproud should convene a roundtable with industry leaders and stakeholders to reach a consensus on the most sustainable retail pricing for fresh milk as well as the appropriate level for a dairy levy and where it should be applied.

“The industry needs a political outreach program that dairy farmers, industry bodies and supermarkets can respond to urgently. While we welcome Dahlsen’s interest in the industry and his concern for dairy farmers, it’s the responsibility of industry players with government assistance to provide solutions and determine the value of any supermarket levy,” Shaughn concluded.

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