What could solve Australia's dairy crisis?

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The Australian public is willing and ready to pay a 10-cent levy for milk to help battling dairy farmers. But can boycotting cheap supermarket milk solve the problem?

Sallie Jones, owner of startup milk brand, Gippsland Jersey, was born into dairy farming. Her dad was a second generation farmer.

After finishing high school, Sallie moved away from the farm to work in public relations in Melbourne.

Sadly it was Sallie’s father’s battle with depression that brought her back to the family farm.

Never ever did we think that suicide would be part of that journey.

A few weeks after Sallie’s father died the dairy crisis swept across Australia.

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It was April 2016 and dairy farmers found themselves front and centre of media coverage blaming supermarket price wars for pushing dairy farmers to crisis point. The public mobilised and started calling for a boycott of cheap milk from supermarkets.

But the boycotts would do little to help the farmers in need. That’s because supermarkets don’t decide how much dairy farmers get paid – milk processors do. They’re like a middle man between the dairy farmer and the retailer. How much they pay dairy farmers for their milk is based on a world market price.

If cheap supermarket milk didn't cause the dairy crisis, what did? 

Well….Vladimir Putin.

When Russian-backed soldiers gunned down Malaysian Airlines flight MH17 in Ukraine, Australia was one of several countries to put sanctions on Russia. Putin retaliated by halting dairy imports from Australia and the EU, wreaking havoc on global milk prices.

Back home, Australia’s largest processing company, Murray Goulburn, was caught off guard and losing money, fast. It reduced the price it paid dairy farmers for their milk.

Adam Jenkins, dairy farmer and president of the United Dairy Farmers of Victoria, was hit hard by the price drop.

“We were given a price at the start of the year, we'd bought hay and we'd bought grain and we'd set up our business on that price. And then half way through that season that price was revised and down changed.”

Another major processor, Fonterra, followed suit. But the real kicker was they both applied the price cut retrospectively. It left dairy farmers in huge amounts of debt.

Dairy Crisis
Adam Jenkins was caught out when the milk prices dropped suddenly.
SBS

Sallie Jones thinks she might have an answer to the power imbalance in the milk industry: cut out the middle man entirely, by becoming your own processor.

But not everyone has been able to do what Sallie has done. A report from Dairy Australia showed that one in five dairy farmers are making plans to leave the industry. And the current drought is making things worse, especially in Queensland and New South Wales.

The Federal Agriculture Minister, David Littleproud, has jumped on board calls for a ten cent a litre levy on all milk sold at supermarkets. But just like the boycott, dairy farmers say a levy might just be another distraction from the real problems they face.

Adam Jenkins says more change is needed.

“We do need a higher price, we need better pricing structures. We do need a code of conduct and we need trust and transparency restored in this industry.”

Sallie knows Gippsland Jersey is not a model for everyone.

“Creating a little milk brand doesn't solve any large scale problems it's just being a positive light in this situation,” she says.

As for what her Dad would think of her work, she says: “I really feel like he's with me on this journey and he would be freaking loving it.”

If you would like to talk to someone about your mental health, here are some people ready for your call: 

• SANE Australia Helpline 1800 18 SANE (7263) www.sane.org
• beyondblue support service line 1300 22 46 36
• Lifeline 13 11 14 www.lifeline.org.au
• MensLine Australia 1300 78 99 78 www.mensline.org.au

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