Australian Farmers Getting Screwed – Dairy Farmers

Posted on FaceBook by Di Bell – May 16, 2016 – a letter from Tamara BatemanDairy Farmer.

I have just read an intensive explanation of what’s happened to the dairy farmers. I am going to post it here to be shared far and wide as the person who wrote it does not have the Internet.


I implore everyone to read it all and see just how “fowl” this all is – you will not believe what this Milk Company has done to the farmers while posting a $413 million profit


This is the post:

 

My sister is not on facebook, therefore has asked me to share an article she has put together to help us understand what is happening to our farmers. Please please share this post. There is power in social media, and power in numbers. Let’s help our farmers:

The Dairy sector is in crisis. People may not understand exactly what has happened, so I have tried to put it in a narrative that people can relate to (without too much personal emotion!) Please share this if you can.
This is the nuts and bolts of it based on my current knowledge and understanding of the situation;
Our Milk Company pays us based on the amount of kilograms of milk solids that we produce (not the amount of litres – a common misconception). At the beginning of each financial year we are given a minimum and maximum range in which we will be paid (plus any incentives for quality etc). We receive a monthly milk cheque based on this farmgate milk price.
This season has been particularly hard comparable to previous years due to drought conditions. It means that farmer’s are already battling, and then this…
In early May, one of the large Milk Companies announced that they would make revised cuts that would be devastating to their farmers. These cuts would be made to recoup money that was lost due to bad decisions and bad management. This had a snowball effect. Our Milk Company saw an opportunity and they took it, and goes like this;

– Up to the 5th of May the farmers contracted to our Milk Company were being mislead into believing that they would receive a certain price for their milk.

– On the 5th of May, we were sent an email and/or text outlining a revision to this price. It was not just a revision, but a ‘retrospective price reduction’ to the start of the Financial Year.

– They informed us (via text/email) that the money they had already paid us… well, they actually want a lot of it back. So to make this work, they would pay us next to nothing for our milk that we produce in May and June.

– The email then went on to say that we are allowed to borrow the money that they were taking from us back… but at a price. It goes like this;
In order for the Company to sustain loaning us back the money that they are taking from us, every farmer (including the farmers that do not take the option) will be paid less for the milk they produce for the entire next Financial Year. In addition to this, the farmer’s who take out the loan must sign with the company for four years, or until the debt is paid off. The farmers feel like they might as well take the loan as we are “paying for it anyway”.

– The email then outlined that they would hold cluster meetings to talk through the changes. They would not come out and talk to us personally. The people who ran these meetings were under-prepared and the CEO didn’t even show.

– On the 6th of May we received an email re-iterating the events, and with it they attached a bulletin with details of a ‘Personal Coaching and Counselling Service’ that was usually only for employees, but they had extended it to farmers.

– The farmers who don’t receive email or texts received a letter in the mail around the 12th May outlining the events (a week after the announcement).

– On the 13th May we received an email outlining a small amount of “back pay” that will be paid to us in August and September. However, we have to pay for this by taking a cut to our farmgate milk price for the entire 16/17 Financial Year. In order to receive this offset payment, we must be supplying the Milk Company at least until the 15th of September. If you leave the Company, you are not entitled to this “back pay”. They are unable to give us this “back pay” now as it will make their Balance Sheets look bad.

 

It is worth noting that the Milk Companies have managed to make this very convoluted and confusing for the farmer’s. This has meant that a lot of farmer’s have been unable to comprehend the complexity of the issue.
The most cautious of Farmers could not have prepared or foreseen this situation, as a ‘retrospective price reduction is unprecedented’. When the tanker takes our milk away and the Company pays an agreed price at that time, you would never conceivably envisage that the Company can renege on that money ten months later, and say that they want it back. Particularly when most or all of that money has been absorbed into the production of that milk at that time.
There is no ‘out’ for some farmer’s. Some of us are tied into the Company with incentives, loans and advances. The Company knows this and are doing their sums and capitalising on the situation. Selling the farm is now not a prospect, who would buy into an Industry with such insecurity. Even if we could leave our Milk Company, the other Milk Companies are unable to take us as they have reached their quota for supply.
The Milk Company has already informed us that they have an oversupply of our milk, and we are lucky to be getting what we are given. So a strike and/or milk tipping may not be the answer, it will probably just hurt us even more.
A bail out from the government is not the answer. It would only encourage big businesses to gamble with our money on bad investment choices knowing that the government will prop them up. We need to force the hand of the Milk Company. The government need to investigate the legality and ethics of the actions of these Companies. An investigation may not help the current situation, but there needs to be legislation passed so that this can not happen in the future. If this is allowed to continue to happen there will never be trust, we will never have security, and there will therefore be no future in this Industry.
The financial and emotional toll on farmers is already prevalent, and the flow on effect from this will continue to be felt far into the future.
Like most farmers, my husband and I are sitting down to figure out how we will get through this time without digging ourselves into a big black hole. We are wondering if there is a future in an Industry that can take back the money that they have already paid you at a whim. We are wondering how you can work 365 days of the year and sacrifice weekends, birthdays, Christmas’s with your family and yet still be unable to provide for them. We are wondering how a Company can post a $413 million profit for the year and can legally destroy the people who made this money for them.
I believe that the Australian farmers who supply this Milk Company need to follow how this Company is operating in New Zealand. They have been a monopoly in NZ for a long time and have therefore been able to capitalise on farmers by underpaying them and forcing them into unfair arrangements such as the ‘Share Standard.’

I have been truly grateful and thankful to all of the general population who are earnestly trying to understand exactly what we are going through, and asking how they can help us. From sharing articles and stories on social media, down to asking what type of milk to buy. People power is an amazing thing, the small wins are important.

Tamara Bateman
Dairy Farmer