The poor take-up revelations come as South Australian Senator Nick Xenophon calls for the reintroduction of a national school milk program to support Australian dairy production.
Prime Minister Malcolm Turnbull and Agriculture Minister Barnaby Joyce met with the board of Murray Goulburn on Tuesday afternoon, to discuss the dairy processor’s savage price cuts for farmers and plans for the future.
In a joint statement, Mr Turnbull and Mr Joyce urged the dairy cooperative to make a plan to restore confidence to the sector, saying it could only remain strong if farming remain profitable.
«It is important Murray Goulburn can explain to their suppliers what steps they will take to support farmers and restore confidence to the dairy sector,» it read.
«The Government recognises that creating a more sustainable dairy industry can only happen if there is genuine participation by industry and stakeholders, and a willingness for all parties to work together to develop solutions.»
The statement also outlined the Government’s support package, urging the Victorian Government to expedite the processing of loan applications.
A further meeting between the Government and Fonterra’s Australian management is planned for next week.
Responding to an ABC Four Corners investigation on Monday, Murray Goulburn chairman Philip Tracy denied accusations the company should have issued earlier warnings to farmers that it’s promised high prices would not eventuate.
Mr Tracy told ABC Rural the board had reviewed its public disclosures and stood by them.
Murray Goulburn’s former managing director Gary Helou continued to argue publicly that a price of $6 per kilogram of milk solids was achievable, until two weeks before the crash.
Low take-up of low-interest loans program
A concessional loans program formed the centrepiece of the Federal Government’s highly anticipated dairy assistance package, announced in May.
At the time, Mr Joyce promised $55 million would be made available for concessional loans «immediately», with dairy farmers able to share in another $500 million worth of loans over the next two financial years.
Three months later, the Agriculture Department confirmed just one loan application was approved by 31 July, with another 48 applications still being assessed.
Paul Mumford, a Murray Goulburn supplier and dairy farmer from Victoria’s Gippsland, said he believed a one-off grant to help relieve farmers’ interest payments would have been more useful.
«Dairy farmers generally would have found it much more beneficial to deliver an interest rate subsidy straight to their own current bank,» he said.
«What I think the Federal Government has done by announcing the $500 million loan facility is somewhat grabbing headlines.
«$500 million is a lot of money, however we’re seeing very poor uptake.
«What we’re seeing is that [by offering loans and not one-off payments] the Government has taken the problem from their monthly cash flow and placed it onto their profit and loss to assist their own finances.»
There are reports some Victorian dairy farmers, already grappling with huge debts, a too-wet winter, and now the busy calving period, felt overwhelmed by the loans process and decided not to apply.
Other Murray Goulburn suppliers, like Mr Mumford, looked into the loans program but decided against pursuing it out of concern it could «fracture» his relationship with his existing lender.
Earlier government concessional loans programs also struggled with low take-up rates, and the schemes were sharply criticised by the Australian National Audit Office as poorly designed and inconsistently managed.
Xenophon calls for reintroduction of school milk program
Meanwhile, crossbench Senator Nick Xenophon has suggested bringing back a school milk program to help farmers.
Senator Xenophon told reporters in Adelaide that a South Australian trial of the program, which was abandoned in the 1980s, would be a good start.
He said the idea was first raised by former senator John Madigan.
«We should look at the feasibility of that,» he said.
«It’s something that will bring a double benefit of nutrition to kids, to primary school children, and also to help the dairy industry.»
Source: ABC
Link: http://www.abc.net.au/news/2016-08-16/dairy-farmers-unsurprised-low-take-up-concessional-loan-scheme/7748310