Mr Fitzgibbon visited Colac today in Victorian dairy country with local State Labor Agriculture Minister Jaala Pulford, following the controversy of Murray Goulburn’s recent decision to slash farm-gate milk prices.
He said he met with many angry, frustrated and worried farming families who were concerned about their capacity to service debt, following the milk processor’s shock move and a similar decision by Fonterra to downgrade payments.
“These dairy farmers have had the rules changed on them mid-game and now they’re trying to work out a way forward and how to service those loans to try and maintain control of their family enterprise,” he said.
“I had a met with a fairly large group of dairy farmers on a farm just outside Colac and we had a free and open discussion about the challenges they face.
“And of course it provided them with an opportunity to vent their frustrations not only with Murray Goulburn but also Fonterra.”
A crisis meeting was also held last night at Terang in south-west Victoria where hundreds of dairy farmers also ventilated anger and concern at the snap farm gate price cuts.
Mr Fitzgibbon said the dairy farmers he met with had no great expectations about any immediate solution he could provide and “sadly” didn’t necessarily expect much of politicians.
But he said they were pleased he and the Victorian Minister visited the region to hold talks and discuss how the State and Commonwealth governments could work together to provide farmers with the assurances they’re looking for.
“I’ve commitment myself to talking with the banks,” he said.
“I believe there are some unique circumstances at play here; not the least being the extraordinary actions of the dairy processors and of course coupled with that is the drought situation.
“I believe it’s an opportunity for the banks to restore some of their reputation by lending a sympathetic ear to these dairy farmers and providing them with the support they need at this very difficult time.
“I think Barnaby Joyce and the banks could help these dairy farmers sleep better at night by giving indications of ongoing support and by indicating they will stand by them.
“That’s not too much to ask and I don’t know why Barnaby Joyce has not done so.”
Mr Fitzgibbon said he would now contact banks by phone or in writing to detail what he believes are the unique circumstances of the milk price downgrade.
He said banks were always concerned about giving special support for one sector which would cause others to expect the same treatment but stressed Murray Goulburn’s actions, in particular, “make these circumstances rather unique”.
Mr Fitzgibbon also warned the banks against foreclosing on any effected dairy farmers struggling until an inquiry by the Australian Securities and Investment Commission had run its course.
“In my view the ASIC investigation is likely to turn up some interesting things,” he said.
“Some of the economic dries can be pretty hard-nosed about these things and might say the farmers were wrong to believe $5.60 was sustainable in the current environment but I have a contrary view.
“Murray Goulburn is a large entity with many smart people in it so therefore the negotiating power between the two (market participants) is not balanced.
“And when you have a minister, Barnaby Joyce running around the country talking about $11 per litre for milk into China it’s not unreasonable for farmers to believe $5.60 is a reasonable price to expect.”
As well as action by banks to ease pressure on debt-servicing, Mr Fitzgibbon said the dairy farmers he spoke to also wanted leadership and government support.
“It’s very important for people who are facing uncertain times to know their government is behind them,” he said.
Mr Fitzgibbon also criticised Agriculture and Water Resources Minister Barnaby Joyce for acting late to offer assistance and inflating government’s role in commodity pricing.
“I can’t believe Barnaby Joyce has been so quiet on this issue; he’s effectively said nothing,” he said.
“He’s very quick to claim credit when commodity prices are rising but goes missing in action when commodity prices are falling.”
Mr Fitzgibbon said the meetings today in Victoria also called for government support through financial counsellors and mental health services.
Alvie dairy farmer Clint Theodore said he met with Mr Fitzgibbon and appreciated the Labor MP’s concerns and pledge for action along with the Victorian minister but held no anger towards Mr Joyce.
“We just need someone to push and shove a bit harder on our behalf; it’s only going to get harder over the next two months,” he said.
“The biggest thing they can do at the moment is push the banks harder to ease some of the pressure – with lower interest rates or hold off on any foreclosures – because a lot of farmers are on edge.”
Earlier this week, Mr Joyce’s office said they’d taken steps to address the crisis by contacting Australian Dairy Farmers, United Dairyfarmers of Victoria, Murray Goulburn and Farmer Power and Ms Pulford’s office.
A spokesperson said any farmers with concerns regarding the legality of pricing arrangements, proposed by the dairy processor they supply, had also been encouraged to contact the Australian Competition and Consumer Commission to investigate; including Agriculture Commissioner Mick Keogh.
Mr Joyce also moved last week to remove a barrier that was restricting some dairy farmers from accessing the Farm Household Allowance, his office said.
Farmers can also apply for Drought Concessional Loans via Rural Finance in Victoria, PIRSA in SA and NSW-RAA in NSW and the Rural Financial Counselling Service was also in action.
A Victorian Dairy Taskforce has also been set up to provide industry recommendations to the Victorian government on measures to support dairy farmers.
Mr Fitzgibbon said in formulating a response, and seeking action on the dairy crisis, he also had a briefing from the Department of Agriculture in Canberra under the caretaker conventions this week adding to his talks today with farmers.
“I didn’t speak to anyone here this morning that thought that government intervention in the market was the answer for them,” he said.
“This is all about realistic expectations about the market – it’s about having a productivity agenda.”