A FLOOR price for milk is providing the dairy industry with false hope when it could in fact kill the already struggling sector, Calare MP Andrew says.
Last week Labor tried to force a vote in parliament requiring the competition watchdog to investigate setting a minimum price on milk.
"I think Labor's proposal has initial appeal, but the more you look into it, it just looks like a political stunt," Mr Gee said.
READ MORE: $1 a litre milk prices dumped by Woolworths
"It's giving people false hope when I don't think they have any intention of bringing it in.
"While change is needed, this change is unlikely even under Labor because Labor isn't saying that they'll bring it in [the floor price], all they're saying is they'll investigate it.
Mr Gee said the introduction of a floor price for wool during the 1980s caused the near-destruction of that sector.
"There were massive wool stockpiles, it ultimately caused prices to plunge, it hurt a lot of producers," he said.
"It made people leave the industry and I think that that experience does loom large in the memories of many farming organisations."
Mr Gee said the farming and dairy industries were treating Labor's idea of a floor price with scepticism.
"The ACCC [Australian Competition and Consumer Commission] has just done a huge inquiry into the dairy industry and they've handed down their final report and they are not proposing or pushing for or recommending a floor price," he said.
Mr Gee said the adoption of the ACCC's recommendations, coupled with supermarket chains ceasing their $1 a litre milk, would give the industry real hope for the future.
"It's got to be a re-balancing of the bargaining power between the dairy farmers and producers and the ACCC has recommended the introduction of a mandatory code of conduct," he said.
"The processors have way too much power and it's preventing dairy farmers from getting a fair price for their produce.
"They're basically at the mercy of the processor in this bargaining situation that they're in, their contracts are not fair."
Mr Gee said a code of conduct would ensure transparency in pricing and would ensure dairy farmers were in the position to get a better deal.
"Make no mistake change is needed, what's going on at the moment can't continue," he said.