QUEENSLAND'S dairy industry is furious after plans to create a "fair milk" label to help producers still reeling from supermarket price wars are marked for rejection.
Katter's Australian Party member Shane Knuth introduced the bill that would set a base price for milk - at least eight cents above production cost - and allow producers to opt-in so their milk was clearly marked as being a fair price.
But the Dalrymple MP's bill was left bruised and bound for the scrapheap after going to committee for discussion.
LNP committee chair Ian Rickuss labelled the bill "unclear and subjective" and something better left for industry to take a lead on.
Mr Rickuss's report also suggested the milk competition had eased as brands took back their previously lost market share.
Mr Knuth warned the industry had been bleeding farmers since the supermarket price wars took hold.
Dairy farmers became collateral damage as supermarket-branded milk was sold for $1 per litre.
"What I have put together is so simple - it is not re-regulation, it is a non-compulsory market mechanism where dairy farmers are paid a fair price then a fair milk mark goes on that milk bottle," Mr Knuth said.
Queensland Dairyfarmers' Organisation president Brian Tessman told APN while farmers may have clawed back market share, the value was lower as supermarket milk weighed down prices.
"At the farm gate in Queensland and northern New South Wales in domestic milk areas, there is no real increase in the price at all from when it was pushed down," Mr Tessman said.
"We have had a reduction in farm gate prices that has not returned, even as the world market price has gone up considerably.
"I reject that assertion that anything has eased.
"I think once again the government has failed the dairy farmers of Queensland."
Mr Rickuss recommends Agriculture Minister John McVeigh work with industry and federal counterparts to "bring more equity into the milk market" and help farmers reach overseas markets.
Mr McVeigh's office said the minister is now considering the report.