Dairy

Dairy code war goes on

By Alana Christensen

The dairy industry’s internal debate about a potential mandatory code of conduct continues to drag on, with Federal Agriculture Minister David Littleproud declaring he is sick of the delays.

The discussion has been continuing for months in the wake of the Australian Competition and Consumer Commission’s April report into the dairy industry, which recommended a mandatory code be put in place to correct the power imbalance between processors and dairy farmers.

Processors have vehemently opposed the mandatory code, stating more work should be done to strengthen the existing voluntary code instead and arguing it has not been given enough time to do the job since being implemented on June 30 last year.

Although he previously stated his personal support for a mandatory code, Mr Littleproud said he was looking for the industry to tell him what it wanted to do.

‘‘I asked the dairy sector to come to a united position on a response to the report and a mandatory code of conduct for the dairy industry. This has not yet happened,’’ he said.

‘‘I’m jack of it.’’

Milk processor and manufacturer representative body Australian Dairy Products Federation executive director Peter Stahle acknowledged the 2016 milk price crisis had broken trust in the industry, but said the ‘‘blunt instrument’’ that was a mandatory code was not the answer.

‘‘We’re asking to spare us the cost. (A strengthened voluntary code) is cheaper and more efficient,’’ he said.

Dr Stahle said the Australian Dairy Industry Council — composed of the ADPF and Australian Dairy Farmers — had put forward a stronger version of the current code of conduct and he believed the proposed version ‘‘had teeth’’ and would satisfy concerns regarding penalties and resolving disputes.

‘‘We’ve been hearing support for that from the most unlikely corners,’’ he said.

The proposal has the potential to gain approval from dairy representatives including the UDV, which has previously declared concerns regarding the current code’s lack of arbitration and the cost and time of implementing a mandatory code.

‘‘We have always said every option is on the table,’’ UDV president Adam Jenkins said.

‘‘Some processors have been bad citizens and need to clean up their act ... We want to get rid of clawbacks and make transparent pricing,’’ he said.

‘‘We want to make sure the recommendation is actually beneficial to the industry.’’

For dairy farmers, such as Malcolm Holm who milks 550 cows at Finley, the answer is simple — whatever the code ends up being, it must deliver for both dairy farmers and processors.

‘‘The debate’s been hijacked by mandatory and voluntary,’’ Mr Holm said.

‘‘The industry has had a voluntary code in place that has been a bit of a toothless tiger, with no mechanism holding processors accountable,’’ he said.

‘‘With the current code we have three processors that aren’t signed up. Given not all processors are signed up, how effective is it?

‘‘If we can’t do (a voluntary code with all processors signed up), then we need a mandatory code.’’