AN 11-cent per litre levy on milk is to be abolished by early 2009 after being established by the Howard Government eight years ago.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The levy was introduced to support dairy farmers through a period of deregulation in the industry. About $240 million has been collected each year through the levy, providing payments to 13,000 dairy businesses over the eight-year period.
The Federal Govern-ment expects the removal of the levy will provide a small saving for families during this period of economic uncertainty.
Bodalla dairy farmer Gary Evans provides milk to cheese factories in Bega and received the levy payment in a lump sum. He said that the price of milk had increased over the past 18 months but was unsure whether the levy’s removal would reduce the price of milk.
“Once it has come off, it’s up to retailers to pass it on to the consumer or not,” he said. “Milk should become cheaper.”
Mr Evans said the levy was introduced to help dairy farmers with running their properties and provided the opportunity to make improvements.
But the last decade has been a period of change for the industry with the size of properties and the labour force shrinking, and the costs of fertiliser, grain and fuel doubling.
The recent drought has also placed strains on the industry.
“Over the last 10 years we’ve not been getting a consistent run of good seasons,” Mr Evans said. “It’s a dry land farm here.
“We used to get a flood every year. I’ve not seen one in 15 years.”
According to Mr Evans, milk production from his 300 cows is down by 200,000 litres for the past year, and year before.
“There’s no grass to fill (the cows) up going into the winter,” he said.
“If there’s no rain in autumn, there’ll be no feed for the winter.”
The supply and demand of milk influences the price it is sold at and it has continually increased over the past 18 months, according to Mr Evans. The reduction of the milk levy, as long as it is passed on to consumers, may provide some relief from this trend.
Woolworths media relations manager Benedict Brook said that the supermarket chain would provide customers with the saving as long as it is passed on to them.
“The milk levy is added by suppliers,” he said.
“If suppliers reduce their prices, we will happily pass on those savings to customers.”