Key points:
NSW farmers can get up to $40,000 in freight subsidies for fodder to feed their livestock during the drought
A Victorian dairy farmer group says freight subsidies push up prices for hay and grain
The NSW Government rejects the call to end subsidies and says it stands behind its farmers
From the first of July, NSW farmers can access up to $40,000 to cover half the cost of trucking in feed for starving livestock.
That is on top of the $40,000 available over the past 18 months.
The president of the United Dairyfarmers of Victoria, Paul Mumford, said the subsidy is distorting the fodder market and pushing up hay and grain prices.
“It doesn’t set a fair and equitable distribution for all players across the two states.”
Mr Mumford said dairy farmers were struggling to source fodder during the critical winter period.
“It’s becoming scarce and if you do get it, it’s going to come at a huge price, so we don’t need the price inflated any more than it already is.”
NSW Government unrepentant
The NSW minister for agriculture Adam Marshall rejected that call and described the idea that drought subsidies are giving NSW farmers an unfair advantage as “absolutely absurd”.
“The NSW Government will do whatever it can to stand by our farmers during one of the worst droughts in living memory and that includes continuing transport subsidies.”
NSW cattle producer Gus Hickman worries about some producers using the government support to hang on to animals when they probably should be de-stocking but wants to see the subsidy kept.
“I really think that it helps, especially out in the Western Division, where the dry has gone on so long and they’re really struggling.”
Across the border in Queensland the State Government has just announced a decision to cut its transport subsidies after a review of drought aid in that state.
Call for changes to fodder invoices
John McKew, the chief executive of the Australian Fodder Industry Association, understands why Victorian dairy famers oppose the subsidy in NSW, but he is also concerned about farmers in drought.
“As a general principle I don’t support (subsidies) because they can artificially distort prices, but on the other hand they are helping farmers.”
He thinks that making fodder invoices clearer might help farmers understand the impact the subsidies may be having.
He wants to see the cost of the fodder and the cost of the transport separated on the farmer’s invoice so it is clear what farmers are paying for.
“Then you’ve got a much clearer and transparent picture of what you are paying for and where the subsidy is applied.”
More detail on the subsidies
Farmers can access the NSW Government’s drought transport subsidy for more than just fodder.
It can be used to transport water to a property for stock or domestic use, move stock to and from agistment, and take stock to sale or slaughter.
The subsidy covers up to 50 per cent of the full cost of freight and a cap of $5 per kilometre (+GST) and 1,500 kilometres for any single journey was in place up until the 1 July 2019.
There is no cap on kilometres per journey for tax invoices paid between July 1, 2019 and June 30, 2020.