FARMERS are the victims in a widespread agricultural recession where retailers are benefiting at the expense of farm gate profits.
Dungowan dairy farmer Malcolm Rose was one farmer who struggled under profit downturns two years ago, as he sold the produce from his 90-head of cattle to major dairy companies.
In 2002, Mr Rose and his wife Lesley formed Peel Valley Milk, a locally-owned and operated dairy brand to save their livelihood.
In keeping milk for their own products, the family escaped the trend where major dairy companies dictated pricing.
Peel Valley Milk, which stocks local corner stores and independent grocers with milk and cream, defies the trend that Australian Democrats agriculture spokesman Senator John Cherry raised last week.
Senator Cherry claimed the Retail Grocery Industry Code was hopelessly inadequate in delivering a fair playing field between farmers, wholesalers and retailers on food prices.
He said a major Federal Agriculture Department report last month revealed farmers' margins in the dairy, egg, beef, pork and fruit and vegetable sectors had fallen sharply, while retailers' profits had increased.
It was found that since 1997, the farmer's share of retail milk prices fell from 42 per cent to 25 per cent of the in-store price, while the retailers' share rose from 17 per cent to 22 per cent.
Mr Rose agreed that dairy farmers received only 25-30 cents for every litre of milk sold in a store.
"Stores and processors take off the cream of the profits."
He said his company attempted to keep the overheads down and offer the public quality milk at cheaper prices.
"I have had the major supermarket chains call me to negotiate selling my products in local supermarkets," Mr Rose said.
"If I stocked the supermarkets, the milk could end up in Sydney and the supermarkets could dictate the price of my milk and what it is sold for."
Mr Rose said his company faced the dilemma that local shoppers often purchased blue lidded milk in supermarkets, rather than green lidded milk bottles in local stores. He said the company could purchase produce from other Tamworth district dairy farmers if the local community continued to support his brand.