Joyce rules out levy, milk regulation

Barnaby Joyce says he's been implored by the milk industry not to regulate the sector.

Agriculture Minister Barnaby Joyce appears to have ruled out a levy on milk or re-regulation of the industry.

But the deputy prime minister has warned retailers they need to clean up their act.

It was completely wrong that water was dearer than milk, Mr Joyce told the regional leaders debate in Goulburn on Wednesday night.

"What I can say to the retailers, this is a problem you are creating for us - if you don't do something about it, we will be forced into doing something about it."

But Mr Joyce said a floor price on milk could create adverse oversupply effects while warning it was not feasible to enshrine levies into law.

Opposition agriculture spokesman Joel Fitzgibbon was more scathing in his assessment, saying there were questions about whether the directors of Murray Goulburn misled both the market and dairy farmers.

Retailers may have made short-term gains on the $1 milk, the reputational damage was worse.

"I suspect the big retailers are starting to learn their lesson," he said.

Greens leader Richard Di Natale backed a floor price on milk but not regulating a base cost.

One-dollar milk had been an absolute disaster for farmers.

"We have got basically Coles and Woolies who are bringing customers in by ripping off farmers."

The federal government has unveiled a $578 million relief package for dairy farmers struggling to cope with a decision by processors to slash farmgate prices, including cheap loans.

Wesfarmers managing director Richard Goyder says it's a long bow to suggest anything the company was doing was impacting on farmers.

Coles accounted for four per cent of milk production in Australia and milk prices were set globally, he told the ABC.