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School milk wouldn't help farmers: Drum

AAP logoAAP 16/08/2016 By Jennifer Rajca

Reinstating the school milk run won't help dairy farmers in regional Victoria, a new federal Nationals MP says.

Damian Drum described the situation for many of the farmers in his Goulburn Valley region as terrible, following a decision by milk giant Murray Goulburn to slash prices and ask for previous payments to be returned.

"Some of them have been up for two hours milking the cows ... and they're losing money in the process," the former state MP and AFL player and coach told ABC radio on Wednesday.

Amongst measures proposed by independent senator Nick Xenophon to help fix the crisis in the industry, is reinstating the free school milk program for primary schools.

"My farmers in the Goulburn Valley understand a 20 cent levy on fresh milk is not going to help them one iota," Mr Drum said.

"Free milk in the schools is not going to help them one iota."

The MP spoke to Prime Minister Malcolm Turnbull and his deputy Barnaby Joyce after meeting with management of Murray Goulburn in Canberra on Tuesday.

There was still a whole range of things under consideration, he said - ahead of a meeting with Fonterra and a symposium in Melbourne next week.

"I think it's a really, really difficult place for government because the last thing any government wants to do is to actually start meddling in the commerciality of this industry," Mr Drum said.

Improving the transparency of pricing could help, but he conceded it was hard to encourage Australians to pay more for dairy products - or to force the Chinese to buy more powdered milk or cheese products.

Deputy Prime Minister Barnaby Joyce says he's looking at what further action can be taken to top-up to the $579 million support package that includes social security payments and cheap loans.

It could include a better indicator for milk prices.

Labor branded Tuesday's meeting a failure and complete waste of time, demanding tougher words from the government.

Murray Goulburn's decision to retrospectively slash prices has left about 2500 producers owing an estimated $200 million, with some indebted farmers forced to sell off cows to abattoirs.

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