Australian farmers have reacted to a news Woolworths will phase out its 10-cent dairy levy, saying that more should be done to support dairy farmers.
The levy will be scrapped by the end of June and means the supermarket giant will stop paying the 10-cent per litre levy to farmers via milk processors from July.
Farmers will continue to receive the 10-cent per litre levy through milk processors until the arrangement ends.
Woolworths dairy director Jason McQuaid said the decision was made due to easing drought conditions and increasing farmgate milk prices.
“From the beginning of the new milk year in July 2022, the farmgate price will continue to be reviewed by processors in line with their usual practices.”
But the move has disappointed farmers who say they are disappointed the levy isn’t being rolled into the base price for milk.
While NSW Farmers dairy committee chair Colin Thompson thanked the supermarket for its “transparency” he said more needed to be done on delivering fairer milk prices.
“The irrational dollar-a-litre pricing model nearly killed the dairy industry, we cannot let that happen ever again,” Mr Thompson said.
“There is a degree of disappointment among dairy farmers that the drought levy was not rolled into the base price.
“Fair, market-based pricing that recognises the true cost of production is what dairy farmers need for a sustainable future.”
Woolworths said it had developed a mechanism to be built into processing contracts to allow the supermarket to provide more timely support for farmers through existing milk purchase arrangements.
