Dairy farmers to get $555m in loans from govt

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Dairy farmers struggling after the milk price cut now have access to more than $500 million in loans. Dairy farmers struggling after the milk price cut now have access to more than $500 million in loans. Dairy farmers struggling after the milk price cut now have access to more than $500 million in loans.

Australian dairy farmers have been granted $555 million in concessional loans by the Federal Government in bid to ease the financial pressure after milk prices plummeted dramatically.

 

Deputy prime minister and minister for agriculture Barnaby Joyce made the announcement today, and the assistance funding is being praised by the dairy industry.

Dairy processor Fonterra Australia reduced its farmgate milk price for the 2015/16 season from $5.60 per kg of milk solids (MS) to $5 per kgMS earlier this month, while Murray Goulburn (MG) says it expects to pay between $4.75 and $5 per kilogram, a drop of around 10 per cent and backdated to the start of the season (July 1, 2015)

While Fonterra and MG say the price change reflects the reality of the supply and demand imbalance that is affecting global dairy commodity prices, and the strength of the Australian dollar, dairy farmers say they will be badly affected financially.

Joyce is confident the funding will help keep small-scale dairy farmers in the industry and ensure a more sustainable future for them.

"I have closely monitored developments following the Murray Goulburn and Fonterra decisions to reduce farm gate milk prices for the 2015-16 season and since that time have had a number of discussions with farmers, industry leaders, processors and retailers," Joyce says.

"The Coalition Government values the contribution Australia’s dairy farmers make to our communities, underpinning regional economies and supplying high quality food products, and they deserve all our support.

"With over half of Australia’s 6,100 dairy farmers directly impacted by Murray Goulburn and Fonterra’s decisions it is clear that this will have a significant impact not only on their suppliers, but also on the confidence of dairy farmers supplying other processors.

"Caretaker provisions prevent me from acting unilaterally and therefore I am unable to announce further support measures at this time."

Australian Dairy Farmers and United Dairyfarmers of Victoria (UDV) praised the announcement, which follows a meeting between the UDV and Joyce in Shepparton last week.

"This is a good, solid package that gives suppliers greater flexibility in managing their debt during this difficult time," UDV president Adam Jenkins says.

"We want to support farmers during the current crisis and this federal package goes a long way to helping."

Today’s announcement comes on the back of an $11.4 million support package announced yesterday by the Victorian industry and Government.

"This crisis is all about farmers working together to find practical solutions to the enormous challenges we all now face," Jenkins says.

"It’s pleasing to see both state and federal politicians voicing their concerns for the industry and offering their support."

Further financial assistance measures are likely to be introduced, according to Joyce, but these will be subject to the current government and Federal Opposition coming to an agreement on the terms.

The package includes:

  • $555 million in Dairy Recovery Concessional Loans
  • $2 million to establish a commodity milk price index
  • $900,000 for additional rural financial counsellors
  • $900,000 for Dairy Australia’s Tactics for Tight Times programme
  • 18 more Department of Human Services employees to help fast-track processing of Farm Household Allowance claims
  • The appointment of a Department of Human Services dairy industry liaison officer

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