Milk processor Harvey Fresh 'disappointed' dairy farmers turn back on pain share proposal

A Western Australian dairy processor says it is "disappointed" its contracted suppliers have rejected a "pain share" proposal. By Anthony Pancia.
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Parmalat-owned Harvey Fresh argued the proposal would have allowed them to combat the global glut and share the cost of transporting milk interstate in a bid to avoid shedding more farmers.
They notified their suppliers that their Proposed Variation of Milk Supply Agreement would not be brought into effect after it failed to attract a 90 per cent approval vote.
The proposal would have seen the removal of a growth incentive for the month of May and the introduction of a surplus charge of between one and four cents per litre which could have cost farmers an average of $20,000 each.
«We are looking for an opportunity where the industry works together and we are able to continue to collect all milk from our suppliers, including those who are out of contract,» the proposal stated.
«Our goal is to avoid the brutal market driven shocks we have witnessed in the last 12 months in WA.»
However a second letter obtained by the ABC reveals the proposal was met with a majority «No» vote, nullifying the offer.
«We are disappointed that the cost sharing mechanism was not accepted,» the letter stated.
«We continue to explore options to manage the current oversupply and look forward to input from our suppliers and how this can be achieved.»
Harvey Fresh notified three dairy farmers in April there contracts would not be extended past June while five other farmers exited the industry due to continued global milk glut in 2016.
Hope not lost
Mike Partridge, dairy section president of advocacy group, WA Farmers, said he was not surprised producers voted against the proposal but added there was «still hope» an agreement could be met.
«There was not enough information shared with the farmers,» Mr Partridge said of the proposal.
«I think the farmers are willing to reduce production going forward and Parmalat will get to where they need to be with their supply-and-demand balance without forcing exits in the industry.»
Mr Partridge pointed to an existing growth incentive offered by Parmalat to its suppliers as what he called «the cause of the problem», but said communications between the company and its suppliers was continuing.
‘Majority doing well’ says Minister
Newly-appointed Minister for Regional Development, Agriculture and Food, Alannah MacTiernan, ruled out subsidising the embattled dairy sector.
Instead, she favours what she called «working with the private sector» to drive innovation and diversification.
«The price that farmers are receiving here is well above the national average and well above what is obtained internationally,» Ms MacTiernan told the ABC at a dairy innovation day in the south-west city of Busselton on Thursday.
«We have to be focused on that and work within that understanding.
«At the moment, I think the majority of people seem to be doing reasonably well.
«It’s not going to be a case of anyone subsidising the industry directly but instead, looking at what opportunities there might be for diversification of product [and] really working with the private sector to drive that, rather than there being a focus on subsidisation.»
Parmalat have been contacted for comment.
Source: ABC
Link: http://www.abc.net.au/news/rural/2017-05-05/processor-disappointed-dairy-farmers-turned-back-on-proposal/8499712
 

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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