Monday, 08 May 2017 08:07

Future of WA farmers hangs in balance

Written by  Rick Bayne
Michael Partridge Michael Partridge

The future of at least three Western Australian dairy farmers hangs in the balance as negotiations to fix oversupply issues stall.

Meetings held between Parmalat-owned Harvey Fresh and suppliers to discuss potential solutions have yet to find a resolution.

Harvey Fresh will not renew the contracts of three of its suppliers leaving them with nowhere to go. Together, they produce six million to eight million litres of milk annually.

Mr Norton said he hoped “common sense prevails” to help all dairy farmers survive.

He said he understood a proposal had been put to Harvey Fresh suppliers and growers that they forego growth premiums for May and share up to 4 cents a litre of the transport costs for excess milk sent to the eastern states to save those facing contract cancellations.

“They put a proposal to suppliers but we haven’t heard anything,” Mr Norton said. “One of the problems is that there hasn’t been enough communication between the producers and what’s going on in the market place.”

“They wanted 90% of suppliers and 70% of growers signed up and I don’t think they’ll get that sort of support.”

Mr Norton’s contract expires June 30. He was originally told last April it would be terminated on January 7. “We bought two Angus bulls when we were told so we could slowly change to a beef herd. It will take a while but we have a plan.”

The model put in place to solve the oversupply problem isn’t working, Mr Norton said.

“Part of the problem is that farmers who’ve had their contracts terminated have sold their cows to other dairy farmers. They were terminating contracts to try to cut production but the cows have gone in other herds so production hasn’t come down.

“The easiest way would be for all farmers to cull a few cows, cut production a bit and take an 8-9% cut, but it’s hard to tell a farmer to take a cut.”

Five Harvey Fresh suppliers were part of the initial group told their contracts wouldn’t be renewed; one sold his herd, the other leased his farm.

Mr Norton said he believed five other farmers had been notified they won’t be picked up as they come out of contract.

WAFarmers dairy section president Michael Partridge said he hoped for a long-term resolution and that no more farmers would be forced out of the industry. He would not elaborate until further meetings are held to try to resolve the issue.

Harvey Fresh did not respond to calls for comment.

The state’s dairy farmers are producing about 17 million litres more than the market needs.

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