Mel Williamson, whose parents-in-law run a dairy farm in Victoria, said they were irate at having to pay back $50,000 by July 1.
«My in-laws are better off than most because they own their land outright, but most farmers here have huge debts,» Williamson said.
Fonterra Australia announced last week it was revising its payments to farmers from $5.75 to $5 per kilogram of milksolids.
It has offered farmers the option of either re-paying the money by July 1, or taking out a loan at an interest rate of 3.95 per cent, payable from 2018.
In New Zealand dairy companies have rarely clawed back advance payments. In 2009 Westland Milk Products had to do so for two months, but usually companies revise their payments in sufficient time that they do not get caught out.
Federated Farmers dairy spokesman Andrew Hoggard said he found himself in the unusual position of defending Fonterra.
«It’s a bit unfair on Fonterra when they [Australian farmers] say why didn’t anybody tell us. Theo Spierings wrote last year that the milk price in Australia was too high and they all got up in arms. The signals have been out there for a while,» Hoggard said.
«I feel for them [farmers], I can’t think of anything worse than going all the way through the season thinking something’s going to be the case and you get the rug pulled out from under you right at the end. In New Zealand we learned soon it was going to be a bad season, and we became accustomed to it.»
Karrinjeet Singh-Mahil, a Kiwi who farms in Victoria, said she had attended meetings this week which had been «horribly emotional with a lot of angry people».
«I spoke to a young farming couple and they trucked two loads of cows that morning to the works, and they’ve got people coming in the next few days to pick through what remains of their herd. They’ve said there’s no future for us in an industry where people can do this to you,» Singh-Mahil said.
Farmers would not have minded taking a drop for the last few months, but Fonterra was making them pay back what they had been paid since July last year.
Singh-Mahil said the dairy giant did not have to, because they had already budgeted to borrow the money to keep farmers going if they had to match the price of competitor Murray Goulbourn.
Managing director for Fonterra Australia, Judith Swales, said yesterday the company had been upfront all season that the milk price did not reflect the market reality, and farmers needed to budget conservatively.
Singh-Mahil rejected that.
«No matter what Judith Swales says, as recently as three weeks ago at our cluster group meeting, Fonterra representatives told us that while the company was losing money in Australia, they had made arrangements to borrow money to make sure they would be keeping their commitment to pay $5.60,» she said.
She labelled the Fonterra move as opportunism, and that they had deliberately held off making a decision on price until farmers had nowhere else to go.
«I’m a Kiwi and we were part of New Zealand co-operative dairy before they joined up with Kiwi and became Fonterra. They have forgotten what they are, a co-operative is not about corporate greed,» she said.
Meanwhile co-operative Murray Goulbourn is in disarray after the resignation of its chief executive and three board directors.
The Australian Securities & Investments Commission is formally investigating the co-op over its shock downgrades to profits and farmgate milk price.
Source: Stuff