Dairy

Fears change will be too slow

By Country News

A mandatory dairy industry code of conduct will be subject to years of red tape and delays and probably won’t improve the position of dairy farmers, according to some in the industry.

The recommendation was a cornerstone of last week’s ACCC report into the dairy industry, yet Katunga dairy farmer Daryl Hoey said he expected it to take years to get off the ground.

‘‘The voluntary one is due to go through a 12-month review soon and discussions with processors to strengthen the voluntary code. If that doesn’t work then we’ll have to look at a prescribed code,’’ Mr Hoey said.

‘‘(The mandatory code) would be so difficult to change and that costs money and ultimately that would have to come out of dairy farmer’s milk cheques. I don’t see many advantages.’’

Processors have also called for the implementation to be delayed, with Fonterra telling the competition watchdog the voluntary code must be allowed the time to work.

A number of other processors, including Lion Dairy and Drinks, expressed concerns regarding how a mandatory code of conduct would be applied to differing business styles in the industry.

The ACCC said in its report that the current Voluntary Code of Conduct was not adequate in addressing structural bargaining power imbalance and the associated contracting practices long term.

UDV president Adam Jenkins said the watchdog’s final report confirmed the group’s concerns.

‘‘Unless processors can heed warning and seriously address damaging contracting practices long identified by the industry, and now by the ACCC, we will lose any control of the process and be left with the sticky fingers of government,’’ Mr Jenkins said.

However, many industry bodies, including Australia Dairy Industry Council and Farmer Power, welcomed the recommendation, stating it was a chance for all sides of the dairy industry to come together to determine the parameters and conditions for processor contracts.