One Nation leader Pauline Hanson has demanded the federal government take action to save the dairy industry.
She said the deregulation of the industry had resulted in many farmers being paid less money for their milk than the price of production.
"It breaks my heart to see the damage that has been done to the Australian dairy industry because of bad government policy," Ms Hanson said.
She said farmers were struggling to make ends meet and called for regulations that protected dairy farmers to be restored.
"The farmers were led down the path to the slaughterhouse because they thought they were going to get a better deal with deregulation," she told The Kenny Report.
She said since then the annual milk produced in Australia had decreased from 12 billion litres to nine billion litres, despite a population rise from 19 million to 25 million.
"Get your bloody act together and start looking after the farmers," Ms Hanson said.
Farmer Jock O'Keefe, from Winslow in western Victoria, said he was pleased Ms Hanson was calling for change.
"We have a lot of farmers leaving the industry," he said.
"In the past two or three years I would say at least five per cent of dairy farmers in the south-west have left the industry."
Mr O'Keefe said the continuing fluctuation in milk prices made it difficult for farmers to forward plan.
He said while Victoria's south-west dairy farmers were experiencing a bumper season, they were still impacted by external factors such as the drought, which drove up the price of feed.
Mr O'Keefe said he believed the industry would continue to shrink due to a lack of confidence.
"We will import more milk and dairy product and we could even get to the stage where there will be seven billion litres (of milk produced)."
Mr O'Keefe said he was pleased Ms Hanson was giving a voice for farmers.
However, he believed a better plan would be to impose a 50 cent a litre levy on milk that is diverted into a farmer fund that could be accessed in difficult times.
Mr O'Keefe said he didn't believe this was unreasonable when people were paying up to $8 a litre for products like coconut water and energy drinks.
Phil Bond, another farmer, said Ms Hanson's proposed lifelife for dairy farmers would be a godsend.
He said a 10 cent a litre levy on top of the price of milk production would help farmers pay off debt and reinvest in their operations and the community.
Mr Bond said he contacted Ms Hanson's office to congratulate her on her efforts to help dairy farmers.