In short:
The South Australian government has provided $3 million in support for dairy farmers affected by the collapse of Beston Global Food.
The funds will provide relief for farmers who have been struggling with increasing costs and drought conditions in the state.
What’s next?
The South Australian Dairyfarmers Association will administer the support scheme for the 43 affected dairy farmers.
In a rare move, the South Australian government has thrown a financial lifeline to dairy farmers left millions of dollars out of pocket by the collapse of a major milk processor.
The state is providing a $3 million fund for dairy farmers owed money after the collapse of South Australian processor Beston Global Food, which went into liquidation earlier this year owing farmers $11.6 million for milk they had already supplied.
The fund will provide grants to struggling dairy farmers, many of whom have been hit with the “double whammy” of ongoing drought.
South East dairy farmer John Hunt is owed about $700,000 and welcomes the support, as he doubts he’ll get much of it back through the liquidation process.
“It’s a real great feeling for farmers,”
he said.
“For them to step in and just give a bit of relief over what has been quite a stressful time over the last six months.
“We’ve been affected by higher costs and the dry conditions … so to get this is real relief.”
The funding announcement will allow Mr Hunt to get back on top of expenses on the farm.
“The overdraft has taken a real hiding,” he said.
“We’ve taken a real hit, this long, drawn-out autumn is certainly taking a toll.
“A lot of people have had to remortgage and do whatever it takes to make sure that we can pay our suppliers and staff … because you can’t sleep at night if you can’t.”
Industry welcomes funds
The South Australian Dairyfarmers Association will administer the $3 million support scheme.
President Robert Brokenshire said the state “couldn’t afford to lose any more dairy farmers”.
Robert Brokenshire says the funds will help dairy farmers remain sustainable and pay off some debt. (Supplied: South Australian Dairy Association)
“It’s a package now that will help those 43 milk suppliers remain sustainable, pay off some debt, pay some creditors, and importantly, help us keep the billion dollar SA dairy industry going,” Mr Brokenshire said.
“Every farmer is doing it tough at the moment, but the exception here was that these farmers are dealing with drought, high input costs, interest rates that are still high, and on top of that, hundreds of thousands of dollars in many of those cases that were not paid after milk was provided to Bestons.
“The government realised this was an unusual but high-risk area for our industry if those farmers can’t survive.”
‘Double-whammy’ for farmers
Up until they were placed into voluntary administration late last year, Beston Global Food Company Limited and Beston Pure Dairies purchased about 20 per cent of milk produced in South Australia.
A processing plant at the Beston Global Food Company, which went into liquidation in Febraury. (ABC News: Carl Saville)
South Australian Primary Industries Minister Clare Scriven said the funds could be used by farmers to “get back on their feet”, including for farm modifications or reducing debt.
“There’s been a real double-whammy for dairy farmers — like most farmers across the state, they are very impacted by drought, but also having the impact of the Bestons closure has meant that it’s magnified so many times,” Ms Scriven said.
“We do not want to see large numbers of our very large dairy industry not able to continue, and that was perhaps a reality for some people until now.”
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