Dairy giant murray goulburn face grilling by malcolm turnbull and barnaby joyce in canberra today

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INFLUENTIAL Senator Nick Xenophon has called on the Turnbull Government to introduce a temporary levy on milk prices and bring back the school milk program in a bid to prop up Australia’s embattled dairy industry.

Prime Minister Malcolm Turnbull and Deputy Prime Minister Barnaby Joyce today met with the board of the nations biggest producer Murray Goulburn, amid fears the industry crisis is deepening.

In a joint statement released this afternoon, Mr Turnbull and Mr Joyce said the intended to look after the suppliers.

There can only be strong and profitable dairy processors if we have strong and profitable dairy farmers, the statement said.

Australias dairy farmers deserve fair returns at the farm gate, as well as transparency in milk price arrangements and supply contracts.

It is important Murray Goulburn can explain to their suppliers what steps they will take to support farmers and restore confidence to the dairy sector.

It said the Turnbull Government would meet with Fonterra next week. The Coalition Government will also consider the outcomes of investigations by ASIC and ACCC into the Murray Goulburn and Fonterra decisions, the statement said

Earlier, Senator Xenophon said dairy farmers were currently being asked to pay for the privilege of milking their own cows, which he described as an absurd situation.

We should be looking at either a temporary levy in the short term to ensure that dairy farmers dont walk off the land and that should be part of a robust, systemic, independent look at the dairy sector, he said.

Clearly, it appears to be verging on market failure given what has occurred.

Senator Xenophon also called for the school milk program to be reintroduced, suggesting his home state of South Australia as a potential trial site.

The school milk program was introduced in the 1950s.

Senator Xenophon said bringing it back would have the double benefit of improving childhood nutrition and boosting the dairy industry.

Earlier, Mr Joyce said he would not pre-empt the meeting, expected to take place in Canberra this afternoon, but would not guarantee farmers debts would be written off.

If we wipe out the debts and Murray Goulburn collapses that is not success, he told the ABC.

So we have to work out, obviously we want to make sure they get a proper price for their milk as quickly as possible.

We want to work out how we do that, that is both legal and also manages to maintain the viability of Murray Goulburn.

ABCs Four Corners program last night revealed in April Murray Goulburn the nations biggest milk processor dropped the price it paid farmers for milk solids by $1 per kilogram.

The program claimed this price reduction was implemented retrospectively, meaning farmers were left with debts.

It said Murray Goulburn was making losses even before it lowered milk prices.

And it comes as dairy farmers consider leaving the industry because they are struggling to make ends meet.

During the election campaign the Turnbull Government announced a $555 million concessional loan program to assist farmers supplying to Murray Goulburn and Fonterra.

The ABC reports just 48 applications had been received.

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