A new interim report by the NSW Dairy Deregulation Impact and Assessment Committee has revealed that since deregulation, almost 300 dairy farmers in New South Wales have been forced to give up their businesses because of the loss of income associated with plunging farm-gate milk prices and uncertainty over the future.

The eight-member committee, which includes members from government departments and the dairy industry, will present the report to the NSW government this week.

The report, which involved state-wide meetings with farmers and milk processors, found that the 1 July deregulation had forced 271 dairy farmers out of business in NSW, leaving 1,454 supplying milk to processors, many of whom were still deciding whether they would keep operating.

“The overwhelming sentiment expressed by dairy farmers…is the need to increase the price they receive for their farm milk in order for them to remain viable,” said the committee: “These impacts have had a serious effect on some rural communities, particularly those where dairying has been a major industry.”

On average, farmers now receive 20% less per litre of milk than they did before industry deregulation, and the smallest farms are being hit hardest, being financially unable to compete with the market power of processors and supermarkets.

The report said that federal government financial assistance schemes had been helpful, but urged ministers to provide tax relief for farmers receiving funds from re-adjustment packages. There is much to be done before confidence in the industry would be renewed, it added.