Dairy farm organization leaders negotiated the deal with the federal government in the face of a relentless push for deregulation by Victorian-based major dairy product manufacturers Murray-Goulburn Cooperative Co. and Bonlac Foods, along with the conservative state government of Premier Jeffrey Kennett.

The plebiscite had been promised by then Victorian state opposition leader, and now premier, Steven Bracks. Bracks scored a surprise upset over Kennett, the country's most prominent conservative politician after Prime Minister John Howard.

In an indication of growing ferment, thousands of people in rural and regional areas, who usually vote Liberal or National, swung to the Labor Party. Kennett's loss was finally sealed in an October 16 by-election, which brought Labor into government with Independent support after seven years of conservative rule. Bracks welcomed the outcome of the plebiscite, saying it would bring "certainty" to the industry.

Dairy farms in Australia are overwhelmingly operated by families who rely on little or no outside labor. Some 80 percent of milk production ends up as dairy products, most of which are exported, in particular to Japan and Southeast Asia.

The dairy industry is the country's third largest rural industry, after beef and wheat production. Milk production has doubled over the last decade to over 10 billion liters in 1998-99. The number dairy farms has fallen from 30,000 in 1975 to 13,500 today. The average farm has doubled in size since the 1980s to 180 hectares (445 acres) as has the average number of cows to 149.

Ten public meetings called by the New South Wales Dairy Farmers Association (DFA) to discuss deregulation were held around the state from late October to late November. Farmers came to find out what the package consists of, to assess whether their counterparts in Victoria would vote in favor of deregulation thus triggering it nationally, and what effect it would have on their ability to remain on the land.

DFA leaders told the meetings that the average payout, to compensate farmers in New South Wales (NSW) for an expected drop in prices they receive for their milk once deregulation occurs, would be A$192,000 spread out in 32 quarterly payments over eight years. This figure is based on 1998-99 average production figures of 700,000 liters. According to DFA executive director Winston Watts, the average NSW farmer would be A$17,855 worse off per year with deregulation.

Robert Worth, a dairy farmer who leases some 200 hectares in the Cessnock area, said at the Singleton meeting if deregulation happens, "It won't be worthwhile to continue [milking]." Worth estimates that he would receive A$300 per quarter in compensation. "This won't even pay the fuel bills, let alone help pay the costs of production, rent, and the rest." Worth also noted that if a lot of farmers are forced to leave the land then the market price of cows will drop.

DFA president Reg Smith told the meetings that the 52 cents per liter paid under regulation in NSW would be expected to drop to at best 40 cents per liter. The compensation package was based on that expected price drop. Smith asserted there would be no net increase in the retail price of fresh milk. However, many farmers were openly skeptical that the price to them would fall only 12-13 cents per liter.

In reply, Smith told the Penrith meeting near Sydney, "There won't be 1,800 dairy farmers in New South Wales" after deregulation. "There may be 1,200 or 1,000, but they'll be big, profitable producers," he said. Peter, a small dairyman from near Sydney, responded that the milk processing giants "want to get rid of all small farmers."

Estimates by the United Dairyfarmers of Victoria (UDV), the DFA's counterpart and like it a supporter of deregulation, are that at least 3,000 small dairy farmers will go under out of 8,000 in the state as a result of deregulation.

Dave Rootsey, a dairy farmer with 450 cows on 270 hectares near Berrigan, attended the Deniliquin meeting to oppose deregulation. He told the Militant, "Consumers won't get cheaper milk.... Retailers will increase their profit margin" if deregulation is pushed through. "I'll be $120,000 a year worse off after the package."

Access to water is a vital political issue in this region, known as the Riverina, near the Victorian border. Without irrigation, rice cultivation as well as dairying in the Murray Valley would cease. The area produces half the annual rice crop in the country and 20 percent of milk in NSW. Rootsey noted, "Three years ago I paid a $12,000 annual water bill. Today it's $40,000."

Yet water is not scarce behind the dams in the nearby Snowy Mountains. "The Hume Dam is at 60 percent capacity. The Dartmouth is at 50 percent. It doesn't add up," said John Cartwright, another Berrigan dairyman opposed to deregulation. The issue is how much those needing irrigation water should be expected to pay and whether it will come from more than 1 million megaliters of surplus water behind Snowy dams, being held for hydroelectric power generation by privately owned power companies. A series of large protest meetings and rallies on irrigation occurred in October in the Murray Valley region. They culminated in a protest march in Albury of 3,500 farmers and their supporters on October 19.

Graeme Spunner, another Berrigan dairy farmer, said in an interview that "99 percent don't want deregulation here.... All the winners will be the multinationals and food retailers."

Rusty Prosser, a dairy farmer from Hardin, NSW, said in a January 2 phone interview that he wasn't surprised at the outcome of the Victorian vote. "Dairy farmers in Victoria are hurting. They voted to accept the package" to get some financial relief, "not for deregulation." According to Prosser, deregulation is by no means inevitable, at least not in the short term.

Efforts by dairy farmers to win support for their right to produce on the land may yet prove decisive in pushing back the Big Three milk processors—National Foods, Dairy Farmers, and Parmalat/Pauls; the two giant national food retail chains, Coles and Woolworths, as well as Murray-Goulburn and Bonlac; as they all push to lower costs and maintain profit rates at the expense of small farmers.

Doug Cooper is a member of the Maritime Union of Australia in Sydney. Ron Poulsen contributed to this article.  
 
 
Front page (for this issue) | Home | Text-version home