Murray Goulburn will consider debt funding of up to $100m to shore up the current farmgate price of $5.20kg milk solids (MS).
With different agendas come highly charged claims and counter claims – it will either be the end of the world as we know it, or the fuse to become even more efficient.
The fact is, the carbon tax will be applied to dairy processors and energy suppliers from July 1, meaning dairy farmers will receive higher power bills and, according to Murray Goulburn, reduced farm gate prices as processors offset their increased costs.
The best thing farmers can do is look for ways to reduce their power bills and we have several examples this issue on how to do it.
Farmers don’t need to rush out and buy the latest in solar power generators - we’re guessing they will be inundated with proposals to do so – a dairy audit will show simple and cost-effective ways to reduce power and save money.
The best thing farmers can do is concentrate on what they do best – produce high quality milk – and be wary of snake oil salesmen that will try and bewitch with how to make money on the Carbon Farming Initiative (CFI) and other “sure fire” proposals.
The Government introduced the CFI as a way for farmers to offset their increased costs by generating carbon credits to be sold in a global carbon trading scheme.
The CFI is a donkey, especially for dairy farmers.
Those who have land to plant to forestry can gain credits under the scheme but the reality does not look like meeting the Government’s best intentions.
The cost of locking up farmland and planting trees will not be adequately rewarded.
So be wary of those who try and convince you otherwise. Remember, if it sounds too good to be true, it probably is.
Farmers at a recent seminar were told to “trust no-one”.
“There will be a lot of sharks out there trying to make money out of the CFI.”
The advice was, if farmers want to explore their options under the CFI, to work with someone they know and trust.
Carbon legislation is not going away. The Opposition said they would repeal it if they win office but this would be unpopular with business which wants certainty.
Many are still concerned about what carbon legislation means for them and nobody knows exactly. It will be at least 18 months before the impact is fully known.
Australian farmers are the most efficient in the world – they have had to be to compete against subsidised competitors. Under the carbon tax, they will have to become even more efficient to keep pace.
There is help available, but make sure it’s from people you can trust.