Senate to investigate dairy crisis

A Senate committee will investigate the legality of retrospective price cuts imposed by dairy giant Murray Goulburn on dairy farmers.

A Senate committee will investigate solutions to Australia's dairy crisis.

The inquiry proposed by independent senators Jacqui Lambie and Nick Xenophon and backed by the Senate on Wednesday will look into the legality of retrospective elements of milk contracts and the behaviour of dairy giant Murray Goulburn.

Dairy farmers have been hit hard by the retrospective price cut imposed by Murray Goulburn earlier this year.