The index has been plagued with problems since the federal Coalition Government promised to deliver it as part of a $579 million dairy support package in May 2016.
At the time, Prime Minister Malcolm Turnbull said the Coalition would “consult with the industry on the design of the index that would provide dairy farmers with valuable information for use in supply negotiations with processors and to assist in following international price trends”.
It took 18 months for the federal Department of Agriculture to award a cut-down $1.19 million contract to the highly qualified Webber Quantitative Consulting team to develop the index.
But the Webber team was then dumped within 24 hours of presenting their index proposal to industry stakeholders on December 14 last year.
One member of the Webber team told The Weekly Times the proposal would have “exposed just how inefficient Australian processors were compared to the rest of the world.”
Webber Consulting members were then gagged from talking publicly on the project, but The Weekly Times understands the industry stakeholders Australian Dairy Farmers and Australian Dairy Products Federation lobbied the Federal Government to dump Webber and its index.
The department then took over the development of the index, which was finally launched by Agriculture Minister David Littleproud in July this year, based on a voluntary survey of farmers’ milk prices and a copy of other global dairy commodity price indices.
The farmer survey was to form the basis of what Mr Littleproud called a Retrospective Farmgate Milk Price Index.
But six months on, the department has revealed the index of farmgate prices has been a flop. A spokesman said data submissions had been received from only 38 farmers — “not enough to publish a farmgate figure for any region”.
Dairy Connect president Graham Forbes said it was a tragedy Webber was not able to develop the index.
“What we’ve got now is useless,” Mr Forbes said.
The Regional, Retrospective Farmgate Milk Price Index relies on farmers providing price data via an online form to give a picture of actual prices received in each of Australia’s eight dairy regions.
