Code brings new era for dairy farmers
The new year will spell the beginning of a new era for the dairy industry, with the early introduction of a new code of conduct.
The mandatory Australian dairy industry code of conduct, aimed at increasing the bargaining power held by dairy farmers, will come into effect in January and replace the current voluntary model.
The code was developed in consultation with farmers and processors and was a key recommendation from last year’s Australian Competition and Consumer Commission’s report into the dairy sector.
WA Farmers dairy section president and fourth-generation Brunswick dairy farmer Michael Partridge said he welcomed the early roll out of the code, saying it will help stamp out unfair behaviours.
“It is no silver bullet in getting value out of the market place for farmers, but it will help with unreasonable clauses in contracts,” Mr Partridge said.
“Hopefully it will make it a more even playing field.”
The code will enable farmers to switch processors more easily, as well as prohibit processors from withholding loyalty payments if a farmer decides to change processors.
Mr Partridge said the odds had been stacked against farmers and the new code would help create more transparency in pricing.
“Due to the nature of the product we produce, farmers have been in a difficult position as far as negotiation contracts,” Mr Partridge said.
“It’s a highly perishable product we sell. We’ve been in a vulnerable position for a long time.”
In welcoming the code as a positive, he highlighted its restrictions in affecting change on the industry as a whole.
“The ACCC also negotiate the imbalance between processors and retailers and this code does nothing for that,” Mr Partridge said.
“The real strength in the market place is the retailers, which the code does not address.”
Forrest MHR Nola Marino, a dairy farmer herself, said the code would provide clearer safeguards.
“Dairy is Australia’s third largest rural industry, with $4.3 billion farm gate production in 2017-18, a retail value of $6.8 billion and $3.4 billion worth of products exported,” Mrs Marino said.
Federal Agriculture Minister Bridget McKenzie said a draft of the code would be available later this week and processors would be bound by the code from January 1.
“I expect dairy processors to keep the exposure draft in mind when developing new contracts with dairy farmers in the coming months,” she said.
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