A South Coast farmer has benefitted from Woolworths 10c drought levy on dollar-a-litre milk, but says the dairy industry needs urgent reform.
Woolworths supermarkets increased the price of two-litre and three litre-milk by 10c per litre in September, in an effort to assist struggling dairy farmers.
In recent weeks, fourth generation Jaspers Brush dairy farmer Justin Walsh received two Woolworths drought relief payments totalling $7000.
"It’s a significant amount of money, and it has made a big difference,” he said.
“We’ve used it primarily to buy feed for the cows but we're also catching up on bills that have been due for a while that we haven’t been able to pay.”
The amount paid is based on the volume of milk provided to Parmalat, with a minimum safety net of $1000 for smaller farmers.
While Mr Walsh said he was grateful for the assistance, he said dollar-a-litre milk was detrimental to the dairy industry.
“Of all the systems out there for drought relief this is by far the best one to actually directly support farmers. It’s a pretty good system in a bad situation," he said.
“But $1 milk is not sustainable and the dairy industry needs reform.”
Mr Walsh said there was a “huge" imbalance of power between the supermarkets and processors and the processors and farmers.
"We need to break the cycle of dollar-a-litre milk because it is causing real damage to the dairy industry,” he said.
“From a farmer’s point of view this is the first step in the right direction, it’s not the answer but it is a little help that can make a difference.”
With the Bureau of Meterology predicting a wet start to the summer months, Mr Walsh said it looked like the worst of the drought was behind us.
“As always when you have a drought like this it will take a good 12 months to recover from that,” he said.
“But if we get that rain in summer we will certainly been on the way to improvement."
The assistance package is only expected to run for a brief period, however Mr Walsh said he hoped to see it continue in future.