Policy Markets Processing

Government Under Fire After Farmers Learn of Cost of Selling Milk

AUSTRALIA – Dairymen have expressed discontent after learning that import tariffs to Asian governments totalled A$204 million last year.

23 September 2013

3 minute read

Oceania

The sums have been described as ‘staggering amounts of money’ by United Dairyfarmers of Victoria which has prompted a joint campaign with the Victoria Farmers Federation (VFF) to get Free Trade agreements (FTA) at the forefront of the political agenda.

Over $116 million of this sum went to the Japanese government in 2012.

A further $27 million was paid to the South Korean government and $17.7 million to the Chinese authorities, according to Dairy Australia, the nation’s levy board.

The VFF has argued that this money should be going to producers such as farmers in Victoria and Tasmania, the leading dairying areas.

Lobbying efforts have not gone unnoticed. Prime Minister elect Tony Abbott has pledged that an international trade campaign will be launched as a ‘top priority’.

But, farmers have heard this before and United Dairyfarmers of Victoria president Kerry Callow says that action must come soon.

“We can't afford the constant delays of the past, when former PM Kevin Rudd repeatedly promised but never delivered an FTA with China,” said Mr Callow. “We've heard the Governments talk up agriculture and its potential for growth, but now we need action.”

One cause for debate is the lack of parity between the five per cent levy China imposes on New Zealand whole milk powder (WMP) and the 10 per cent levy charged on Australian WMP.

This lower levy has benefited New Zealand since 1998 when a Free Trade Agreement was negotiated with the Chinese. The 5 per cent levy is scheduled to reduce to a 0 per cent tariff in 2019

Autralia’s new leader, Mr Abott, has already had many questions posed to him by the dairy sector following his appointment in office on Wednesday September 18.

Some questions from Tasmanian producers have been answered by Mr Abott’s dairy industry manifesto.

Heading the bill is the ‘re-establishment’ of the Cadbury’s Hobart plant, a, $66 million project of which $16million is being contributed by the coalition government.

Mr Abott said: “This commitment will re-establish Cadbury’s Hobart plant as a tourist destination that will generate economic and social benefits for Hobart and Tasmania. It will also support the construction of a new visitor centre to accommodate large tour groups and enhance tourist experiences.

Mr Abott’s coalition has said it will create 200 direct jobs within the dairy sector and help secure a further 600 jobs.

This promise has been met with an output target of 120 million litres for Tasmania. This will mean 6,000 more cattle in the area and an increase on current production of 37 million litres.

Ambitious plans have also been announced to make the ‘first step toward producing a 100 per cent Australia-made chocolate bar’.

Behind this dream is a production target of 70,000 tonnes of chocolate per year, a 30 per cent increase.

The coalition’s promises extend to cocoa growing trials in the Ord river as a new opportunity in agriculture and growth.