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PUBLISHED: May 25, 2016 1:12pm

Massive bailout for Australian farmers due to global milk price slump

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Source: Bernama Source:
Bernama

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CANBERRA, 25 May 2016: 

Struggling Australian dairy farmers have been given a half a billion dollar lifeline today after the nation’s Agriculture Minister announced a dairy package to bail out debt-ridden farmers, China’s Xinhua news agency reported.

Following a milk cooperation price war which left farmers crippled financially, Barnaby Joyce announced the US$430 million package – which will be given to farmers in the form of a concessional loan at a lowered repayment rate.

Under the changes, farmers will be allowed to borrow up to US$740,000 or half of what they owe, whichever is the lesser, while they will also get access to a farm ‘household allowance’, which provides dairy farmers with a US$740 fortnightly payment to help raise the standard of living.

The dairy industry has been in the spotlight over the last month, after a cut-throat price war erupted between dairy giants Fonterra and Murray Goulburn, slashing wholesale milk prices by 10% or more, crippling farmers.

Murray Goulburn slashed milk solids prices from A$5.60 per kg to between A$4.75 and A$5 per kg, with competitor Fonterra doing the same shortly after.

According to local media, in some cases the cuts resulted in the loss of up to two years’ of profit in one day.

Joyce said Australia’s farmers were the backbone of a strong economy, and the half a billion dollar package would help farmers get back on their feet.

“We’ve listened clearly to what the dairy farmers want, and what they want is access to concessional loans at the cheapest rates we can possibly get.”

The issue was brought into mainstream attention partly because of the 16-year-old daughter of a struggling dairy farmer urged the public to stop buying cheaper, home brand supermarket milk in favour of independent milk which puts more money in farmers’ pockets.

Following Joyce’s announcement today, Chloe Scott, who started the online petition in support of branded dairy products, said she was “proud” to have played a small part in raising awareness of the plight of many dairy farmers.

Scott’s petition has so far been signed by 160,000 Australians.

“I welcome the announcement but now we need to keep pressure up to make sure the government follows through,” the 16-year-old told Macquarie radio today.

“I feel so proud of my family and the 160,000 Australians who took action.”

The news came as local media is reporting that major supermarket brands are “struggling” to keep up with the demand for branded milk.

Social media platforms are awash with photos of empty shelves from frustrated consumers who are unable to purchase branded milk, who are instead forced into purchasing the “dollar per litre” home branded milk which has contributed to the milk crisis.

A spokesperson for Woolworth, which along with Coles is one of the two major supermarket chains in Australia, said there had been a “noticeable increase” in demand for branded milk since the petition and media coverage had gone viral.

“We are working together with our suppliers to respond to that change in customer demand as quickly as possible given our customers’ desire for choice,” the spokesperson told Fairfax Media.

The news also coincided with a protest on the steps of state parliament in Melbourne, in which dairy farmers rode tractors and brought cows into the city centre to protest the price war between the Fonterra and Murray Goulburn.

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