SUBJECTS: Lion Dairy acquisition; Diary Code of Conduct; minimum farm gate milk price.
LAURA JAYES, HOST: Lets go live to Canberra and the Shadow Agriculture Minister, Joel Fitzgibbon, joins us. So, I just want to ask you about the front page of the Australian Financial Review this morning and dairy farmers have got a little bit of airtime over the last couple of weeks about milk price. Nothing has been done in the Senate so far. Now there is a bit of pressure on Josh Frydenberg to look at this potential sale of one of Australia’s largest milk processors; do you have concerns about this Joel Fitzgibbon?
JOEL FITZGIBBON, MEMBER FOR HUNTER: Well, first of all let me say dairy should be in the news every day. In fact, it should be front page every morning because it’s not an overstatement – it’s not overreach to suggest that we are now at risk of losing our diary sector. Our farmers are leaving the land on a daily basis, first caught in a cost-price squeeze, they are now being impacted by drought and we are literally losing them, and this government is prepared to do absolutely zip about it. We heard Senator Susan McDonald from the LNP on ABC radio this morning offering a solution finally. She says consumers should turn up to their supermarkets and insist on paying more for their milk. So she has acknowledged there is a huge problem but she wants consumers to fix the problem by voluntarily offering to pay, or demanding to pay was her words, to pay more for their milk.
Now, this is no solution obviously, Laura. David Littleproud, the Drought Minister, some time ago said he fixed the supermarket problem. He said he thumped his chest, waved his fists at them, and demanded they put their milk prices up. Well, we know that solution lasted about five minutes. They are still fiddling with this Dairy Code of Conduct. It’s now more than 20 months since the ACCC recommended we have a mandatory Code of Conduct for the dairy industry. The Labor Party has been supporting one for a number of years, so there has been no interference from the Opposition party. There is no excuse, and yet they’re still arguing within the National Party and the Liberal Parties about what this Diary Code of Conduct should look like. This is after, of course, introducing a Sugar Code, a Code of Conduct for the sugar industry literally overnight a number of years ago when Scott Morrison was the Treasurer. So Laura, dairy farmers and consumers alike, all people concerned about our dairy farmers should be asking the question what in the hell is going on within this government?
JAYES: Well, what is the answer here, we will get to the milk price and what consumers should and shouldn’t do and what should be mandated in a moment. As you outlined the problems, do you think this sale of one of Australia’s largest milk processors, Lion Dairy, should be paused while what you outlined is sorted out?
FITZGIBBON: Well, this mob have been in government for six years or more now Laura. The architecture we have for approving or otherwise foreign investment acquisitions is the architecture of this government. And yet today again, you see people from the government out there calling for a pause. Now, we have to have confidence in our investment system, but the Green Pastures report…
JAYES: Sure, but would this pause – would this pause actually hurt these farming communities even more? If they are so desperate as you say, they’re obviously looking at sale as one of the last options, so is that going to hurt them even more?
FITZGIBBON: But the question – well it could, Laura. The question has to be what is the pause for? What is it designed to do? This has been – this proposition has been through a rigorous process, this government appointed David Irvine, one of Australia’s top spies as the Chair of the Foreign Investment Board, and I welcome that – he is a good guy and I know him well, highly regarded and respected – he chairs the board that has approved this acquisition. So what is it the government members who own this architecture want to pause the decision for?
Look, the Green Pastures Report, it’s a little old now I admit, about 2015, said that to be in successful in Agriculture, we will need about 600 billion – that’s with a B – dollars’ worth of investment to lift productivity, to invest in infrastructure, to build scale in this country, and as a country of 25 million people, we will need investment and we will need foreign investment. And, we’ve had it for decades from the US, from Canada, and New Zealand, and now as Asia grows we will be offered more from Asia and as long as we have a rigorous screening process, and I do, I have confidence in it, government members should also be expressing confidence in it, then we should be welcoming the investment. Now, remember Bellamy’s, for example, almost fell over in 2016 because of lack of capital in part. So, now we’ve got a company which will have an injection of money to build strength, to employ people in Australia, and to, I hope, help to offer a decent price to our Diary farmers. Can I just say quickly, Laura, just over a week ago – a few weeks ago maybe – we gave the government an opportunity to vote again for a minimum farm gate milk price for our farmers so they can get a decent milk price at the farm gate. We can’t sit back any longer and allow processors to pay our famers at or below their cost of production, particularly…
JAYES: And what is that minimum price?
FITZGIBBON: Well the minimum price would be set by an independent regulator. It would access the cost of producing a cost a litre of milk in each region, because every region is different, and then it would set a price just above, it would determine where above the cost of production. Now, that wouldn’t mean farmers wouldn’t be free to negotiate a better price than the minimum price, certainly not. But it would give them investment certainty; an opportunity to reinvest in their farm business, to lift productivity and to even better again. But, the LNP, including Senator Susan McDonald, who on radio this morning said consumers should pay more, voted against that proposition in the Senate a few weeks ago.
JAYES: I mean she’s right technically isn’t she though? Consumers should pay more?
FITZGIBBON: Well, it’s a great leap of faith and hope isn’t it Laura? I can just see hordes of consumers going into Woolworths and Coles demanding that they take an extra dollar off them for their litre of milk. This is how hopeless this government is. Now their only solution is to demand consumers pay more. Well, how about a bit of focus on both the retailers and the process. We want them all to thrive, but we want the profitability to be even across the supply chain and if we lose our farmers, the processors won’t have any milk to process and that’s not going to be good for the processors surely.
JAYES: Joel Fitzgibbon thanks for your time this morning.
FITZGIBBON: A pleasure Laura.