An Australian teen has launched an online petition taking aim at the "greedy" milk companies she says are destroying farming families.

After 21 years the Scott dairy farm business in rural Victoria is on the brink of collapse under the weight of increasing debts from its milk payment contract with New Zealand co-operative Fonterra.

Chloe Scott, 16, and her mother Melissa have been forced to move out of the family's Boorcan home, leaving her father Brendan to work the property alone and deal with mounting costs.

Earlier this month, in the wake of a global price crash, both co-op Fonterra and Australian industry giant Murray Goulburn announced they would be slashing the raw milk price paid to farmers by up to 10 per cent.


In many cases farmers will have to repay hundreds of thousands of dollars because their milk did not sell at the same high price it was bought by processors.

Reports have been circulating through the Victorian farming community that the pressure of mounting repayments is so bad that it has led to suicides in South Gippsland and Warrnambool.

"It's definitely been heard of, a lot of rumours are around like that, there's a lot of that going on," Miss Scott said.

Miss Scott has urged the Federal government to intervene by way of a petition which has already attracted almost 88,000 supporters.

Like many of his colleagues Mr Scott has been forced to reduce his cattle numbers significantly.

His daughter said that from a herd of about 170 he now works just 48.

"It's been little bit stressful for me, I shouldn't really be worrying about it," she added.

"My petition asks for Agriculture Minister Barnaby Joyce to step in and take action early to right this horrific wrong and to review the milk pricing system."

As Murray Goulburn faces a class action by investors over the price war, Fonterra announced on Tuesday they would increase the gate price - for some farmers who have already sold off stock that announcement may have come too late.

Farmers, meantime, hope that a "milk levy" is a potential long-term solution.

It would mean shoppers may be forced to pay up to 50 cents extra per litre, with the extra amount to be passed onto farmers.

My petition asks for Agriculture Minister Barnaby Joyce to step in and take action early to right this horrific wrong and to review the milk pricing system.


Last month, Australia's biggest dairy supplier Murray Goulburn announced it was no longer feasible to pay its suppliers from $5.60 to $6 per kilogram for milk and would drop prices to $4.75 to $5 per kilo.

The world's largest dairy export company Fonterra slashed its prices from $5.60 per kilogram to $5.

Murray Goulburn blamed the stronger Australian dollar and poor sales of adult milk powder in China for its woes.

A Fonterra spokesperson told the Herald its milk suppliers in Australia are being impacted by a reduction in the price they paid for their milk.

"Fonterra Australia is contractually obliged to pay farmers a milk price not less the leading Victorian milk processor. That price was set at an unsustainable level that was not a true reflection of global dairy market reality," the statement said.

"As a result we have been losing money for two years so cutting our farmgate milk price was unfortunately necessary. No one can stand by and watch their business continue to lose money. We owe it to our shareholders and our farmers to ensure our business is sustainable for the long term. We are working with our milk suppliers in Australia to assist them with loans to help with cash flow."

This week Australia's competition watchdog announced an investigation into recent decisions by Fonterra and Australian competitor Murray Goulburn Co-operative Co Ltd to slash farm gate milk prices. The Australian Competition and Consumer Commission is examining the timing and notice of the cuts.

A finding of misleading or unconscionable conduct by the ACCC could expose Fonterra and Murray Goulburn to fines of up to A$1.1 million (NZ$1.2 million)

- with additional reporting from Reuters.