Fonterra Australia is reportedly facing a Senate inquiry into its decision to slash the price it pays farmers for raw milk.
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At the beginning of January, Fonterra said it had withdrawn its November step-up payment of 7c/kg butterfat and 17c/kg protein to Australian farmers, citing the recent deterioration of world dairy market prices, which have dipped as a result of the global financial crisis.
The move has caused concern in the dairy community, Australian farmers’ union the United Dairyfarmers of Victoria (UDV) said.
“Dairy farmers are seriously concerned by the announcement and the impact that it will have on the dairy industry,” UDV president Doug Chant said.
The widespread public concern has reportedly prompted the Australian Senate committee responsible for food production to launch an inquiry into the issue next month.
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By GlobalDataAccording to a report in The Weekly Times, Liberal Senator Bill Heffernan, head of the committee, said he was “alarmed” by Fonterra’s move and its implications for future food security.
“We need fresh milk and fresh milk products, and I’m concerned the viability of these industries is at the mercy of global corporate giants,” he said.
“We’ll be asking Fonterra to explain their actions to see if they are logical and in the national interest,” he said.
Fonterra is due to issue a further decision on milk price payments on 27 January.
