VICTORIA'S Agriculture Minister Peter Walsh will talk to banks and write to the Federal Government about the battles dairy farmers face.

Mr Walsh plans to urge senior bank lenders operating in south west Victoria to "take a longer-term view in their decision making'' when dealing with dairy farmers.

"Some people are bumping up against their over-draught limits, which could stop people from buying hay to feed their cows, and obviously that has an effect on production, and if you aren't producing you won't get any income, which will make things worse,'' he said.

Dairy farmers are suffering from an unprecedented collision of low milk prices, low feed supplies - due to prolonged dry weather and subsequent lack of pasture growth - and rising production costs, such as rising electricity charges.

In efforts to assist dairy farmers, Mr Walsh plans to meet with lenders in coming weeks, as well as milk processors.

He said the fact that 600 people turned up to the recent Noorat dairy industry crisis meeting, at short notice, was evidence that "this is a very real issue for many people''.

Mr Walsh will also be writing to his federal counterpart, Agriculture Minister Joe Ludwig.

"The key emphasis for the Commonwealth is long-term market access,'' Mr Walsh said.

"The New Zealand dairy industry has a competitive advantage over Australia because its free trade agreement with China, it has low tariffs of seven or eight per cent, and that obviously gives an advantage into China.

"The emphasis to the Commonwealth is in pushing harder on market access.''

Regarding the impact of the supermarket duopoly and milk-price wars, Mr Walsh said international markets mostly influenced milk prices in Victoria.

By improving market access into international markets, dairy companies would "have to compete more (on price) to get the (Victorian) milk''.

Meanwhile, in April last year, ahead of the May budget cuts which saw the Department of Primary Industries hit by cuts, Mr Walsh said he had asked the department to prioritise staffing to areas that boosted farm productivity and profits.

He said then that, as a result of the drought, the DPI had entered social welfare areas but was better off focusing on research and productivity issues.

Despite this, Mr Walsh said this week that there were still a number of services available for farmers in need.

The Rural Financial Counselling Service was available and on-going.

"Also, the farm debt mediation legislation will also assist; now before (a lender) can instigate a forced sale, a trained debt mediator has to come in and assist (the farmers) in dealing with the financial institution.''

Mr Walsh said he believed there were adequate state social services, now in place, to assist farmers.

The Minister said he had also urged the new grassroots lobby group, Farmer Power, which has been started to draw attention to the plight of struggling dairy farmers, to "work with your existing agriculture representation bodies''.

He said the State Government had a good relationship and had "positive interaction'' with the Victorian Farmers Federation.

"But at a national level, I couldn't comment,'' he said.

The VFF and its dairy arm, United Dairyfarmers of Victoria, were also meeting Farmer Power representatives last night.