Tasmanian dairy farmers question National Foods' product prices

A group of dairy farmers in the Australian island of Tasmania are calling for a Senate inquiry into the behaviour of Japanese owned National Foods.

The 29 dairy farmers who supply National Foods, in southern Tasmania, say the milk price being offered is below the cost of production.

The farmers also claim the price is well below that paid to farmers in other states.

Group spokesperson and dairy farmer Phil Beattie says their efforts to bargain with the company have failed, and they are calling for the senate inquiry as a last resort.

He said National Foods is misusing its market power and that the company has suppliers in "New South Wales and Queensland have been paid two and half to three times as much as us".

Federal Senator Eric Abetz says a Senate committee will now look into farm gate milk prices in Tasmania.

He says he has spoken to the Chair of the Senate Select Committee into Agricultural and Related Industries, Senator Bill Heffernan, who has agreed the committee will examine the issue as part of an inquiry into food production in Australia.

Abetz says Tasmanian dairy farmers have been doing it very tough "due to the recent long drought, now they are being offered prices for their milk which are below cost."

Abetz added that National Foods should put their side of the equation to the committee to assist Tasmanian farmers for the inquiry.