A leading South Australian dairy farmer has urged his colleagues to attend the Victorian meetings on the proposed Mandatory Dairy Code, after a poor turnout in that state and Tasmania.
Rick Gladigau, Mount Torrens, SA, said while only six farmers had attended the two South Australian sessions, the meeting was still important.
It’s believed only a handful of farmers turned out for the first of the consultation sessions, in Devonport, Tasmania, on Thursday, November 8.
“It concerned me that there has been so much noise, with people going on and saying ‘we need a code’ but when you have the opportunity to have input, very few people are turning out,” Mr Gladigau,
He said small numbers might not be a bad thing.
“If you have 40 people in the room, not everyone gets to have a say on the code,» he said.
But definitely turn up – if you have an interest in the industry, you should go along and have a say.”
The Federal Government is seeking feedback on a mandatory code of conduct for the dairy industry.
Code concerns
It followed a number of inquiries into the industry, most recently by the Australian Competition and Consumer Commission.
The ACCC inquiry raised concerns about fairness and transparency, in contracts between dairy farmers and processors.
The department wants feedback on what should be included in a code and how best to address issues such as:
Cooling off periods when entering and terminating contracts.
Dispute resolution processes.
Limiting exclusive supply clauses between processors and farmers.
Prohibiting retrospective milk price step-downs.
Terminating contracts.
Mr Gladigau said discussion at the Hahndorf, SA, meeting covered topics such as step-downs, when prices should be released and cooling off periods.
“People should go, even if you don’t say anything or want to have a say,” Mr Gladigau said.
“At least you are getting an idea about the mandatory code, and what people are thinking.
“People have been annoyed about things – here’s an opportunity to get it as close to right as possible.”
He said he was pleased Federal Department of Agriculture and Water Resources staff listened to the concerns raised.
“They are not condemning anything, they are certainly listening to everything, and taking notes,” Mr Gladigau said.
UDV position
United Dairyfarmers of Victoria president Adam Jenkins also encouraged all producers to have input into the code.
“The Australian dairy industry has now got a set of mandatory regulations being developed by government, detailing how farmers ought to do business with their processor,” Mr Jenkins said.
“A mandatory code will affect every single dairy farmer in Australia, whether we like it or not, so it is important farmers attend and have their say on what they think should or shouldn’t be included in a mandatory code.
“It’s crucial we address the power imbalance between dairy farmers and processors.
“It’s also crucial a government regulatory tool, such a mandatory code is developed with rigor and can address the range of different issues facing the different milk markets.”
Mr Jenkins said the UDV would contribute to the consultation process and highlight critical areas, such as the need for a dispute resolution process that is entirely independent.
“That needs to be sorted out, as soon as possible,” he said.
He said he was concerned at the short notice, given for the consultations.
«Farmers are very busy people, at this time of the year, with harvest, and I would have assumed they would have given us more notice,” Mr Jenkins said.
“But we would hope farmers would turn up, and give their views.”
ADIC’s position
The Australian Dairy Industry Council has called for retrospective milk price step-downs to be banned, while contract disputes between farmers and processors should be handled through a thorough complaint and mediation process.
The Australian Dairy Industry Council, which comprises peak industry bodies Australian Dairy Farmers, and Australian Dairy Products Federation, representing farmers and processors respectively, has submitted a draft code to the Department of Agriculture and Water Resources to be considered during the consultation process.
Under the proposed ADIC Code:
Retrospective price step-downs are banned, and processors must give farmers at least 30 days’ notice of any forward step down, including a reason for the adjustment.
Contract disputes are to be managed by an independent mediator or arbitrator if the issue cannot be resolved between the farmer and processor.
Dairy businesses must act honestly in good faith, without duress or pressure during contract negotiations, or risk fines.
Agreements must be for a minimum of 12-months operating over a financial year or other term as agreed by both parties.
Processors must offer farmers a standard contract with an opening price by June 1 each year, one month before the start of the next financial year.
Processors must pay farmers by the 15th day of the next month for milk delivered under their contract.
Both farmers and processors must give 30 days’ written notice if they don’t intend to renew a fixed term contract and agree on a debt repayment scheme for outstanding payments.
“A new code of practice is an important step for the dairy industry that will clarify and strengthen relationships between farmers and processors across all states of Australia,” ADIC chair Terry Richardson said.
“Our aim is to address the information asymmetries that currently exist in the industry and strengthen bargaining power for farmers while respecting commercial realities and supporting innovation and market dynamics.”
The draft ADIC code is the result of an extensive review the organisation conducted into the dairy industry’s current voluntary code and addresses the recommendations handed down by the Australian Competition and Consumer Commission (ACCC) in its report into the dairy sector.
“The ACCC identified a number of areas that need fixing, and our aim is to help the Government implement a code of practice that improves the relationship between all parties,” Mr Richardson said.
Be part of the mandatory code consultation
Where and when regional consultations on proposed dairy mandatory code will be held
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