The government is prepared to defy world trade rules in its bid to increase assistance to the dairy industry, which has already received the largest farm aid package in Australia's history.

Deputy Prime Minister John Anderson revealed the government's determination earlier today, with news that the dairy industry's A$1.79bn restructuring package would be boosted by an additional A$140m. 

Australia's fresh and processed dairy products account for around 12% of the world dairy trade, and critics fear that the increased aid is masked protectionism to boost the country's market presence. In response to such claims, Anderson commented: "well boohoo if they do, given the way most of them behave on their domestic markets at the moment, that's all I can say."

"The behaviour of many other nations in relation to agricultural protection is both stupid and wrong. It is stupid because it doesn't save their farmers, it just damages world trade and drives down prices, and it's wrong because of the impact it has on innocent bystanders," he added.

Last July, deregulation in Victoria, which produces two thirds of national output, saw the farm gate price spiral. Anderson admits that "deregulation has had a more severe impact than could have been recognized at the time." While the consumers are picking up a better deal than ever, dairy farmers in many areas are struggling to afford the "massive structural adjustment."