Agriculture minister Barnaby Joyce has put supermarkets on notice over dollar-a-litre milk and says the competition watchdog is investigating the matter.
Mr Joyce believes Australians are awake to the human cost of cheap milk, telling the Seven Network "they're going to say to you, dollar-a-litre milk ... gives us a bad taste in your mouth about your supermarket because we know the way that you get that dollar-a-litre milk is to exploit the person behind the farmgate."
Opposition Agriculture Minister Joel Fitzgibbon has backed the government's support package for dairy farmers, but says it falls short.
The Federal Government yesterday announced it will offer more than half a billion dollars in concessional loans, on offer for dairy farmers impacted by recent milk price cuts.
Late last month Australia's biggest milk processor Murray-Goulburn slashed how much it would pay from $5.60 per kilogram of milk solid to between $4.75 and $5.
That was closely followed by the world's biggest dairy exporter Fonterra, dropping its price to $5.
The price drop leaves farmers roughly 1 cent in debt for every litre of milk sold.
Mr Fitzgibbon says the government needs to do more.
"I'm glad the Australian community has shown the spirit to get behind the farmers and pay more for milk that they have to but at the end of the day, we need to hold to account the people who are responsible for this current crisis, and in the first instance that's Murray-Golburn."
Agriculture Minister Barnaby Joyce has ruled out a levy on milk.
He also warned against a floor price on milk, saying it could create adverse oversupply effects.
But Greens Leader Richard Di Natale says setting a minimum, or "floor price" may be an option.
"$1 milk has been a disaster. It's been an absolute disaster for farmers. We've got basically, Coles and Woolworths who are bringing customers in by ripping off farmers, and what they're doing is using milk to get them to come in to buy soft drink and chips and the consequence of that is that farmers are going to the wall. So it is a disaster and you've got to do something about it. You don't want politicians setting the price of milk, but you've got to have a good hard look whether a floor price is neccessary here."
