Dairy farmers oppose build-up of reserves

Press, 1 June 1985, Page 2

Dairy farmers oppose build-up of reserves

Federated Farmers’ dairy section is totally opposed to any further build-up of the industry reserve account when this season’s trading results are known, according to the section’s chairman, Mr Bruce Tolich. Farmers were saying to him that any profits from this years trading must be given to farmers, said Mr Tolich. Federated Farmers had presented a submission to the Dairy Board and asked that 100 per cent of any trading surplus be paid to farmers, which would mean farmers could receive $4 a kilogram of milkfat or more for a final payout. Mr Tolich said the Dairy Board was able to reveal on Thursday the latest data on

dairy fanners’ expenditure which confirmed the dairy section’s worst fears that the basic price for wholemilk paid to farmers had retained far too much of the fanners’ export receipts in the reserves, starving farmers of the necessary cash flow to keep bank overdrafts down.

As a result, dairy farmers were working to pay interest to the banks. Almost a quarter of dairy farmers’ expenditure was now on interest.

Mr Tolich said the dairy section warnings had not been heeded. Expenditure as a percentage of revenue was much higher than expected.