Retrospective milk price step-downs should be banned and contract disputes between farmers and processors handled through a thorough complaints and mediation process, according to Australia’s peak dairy lobby.
The Australian Dairy Industry Council, which comprises of Australian Dairy Farmers and Australian Dairy Products Federation, said a new mandatory code of conduct would help to clarify and strengthen relationships between farmers and processors.
‘‘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,’’ ADIC chair Terry Richardson said.
The draft ADIC code is the result of an extensive review into the dairy industry’s current voluntary code and recommendations suggested by the Australian Competition and Consumer Commission.
‘‘The ACCC identified a number of areas that need fixing (in its April 2018 report into the dairy industry) and our aim is to help the government implement a code of practice that improves the relationship between all parties,’’ Mr Richardson said.
Under ADIC’s proposed code of conduct processors must give farmers at least 30 days’ notice of any forward step-down, including a reason for the adjustment, and dairy businesses must act honestly in good faith, without duress or pressure during contract negotiations.
The body is also calling for farmers and processors to 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.
UDV president Adam Jenkins said it was key that a code addressed imbalance between dairy farmers and processors.
‘‘A mandatory code will affect every single dairy farmer in Australia, whether we like it or not, so it is important farmers attend (consultation sessions) and have their say on what they think should or shouldn’t be included in a mandatory code,’’ he said.
Mr Jenkins said the UDV would advocate for an independent dispute resolution process.
It took more than four months for industry to agree to supporting a mandatory code of conduct, with the ADPF and the UDV among those voicing concerns.
The federal Department of Agriculture and Water Resources is seeking feedback on 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 and terminating contracts.
■A public consultation will be held on Tuesday, November 27 from 10.30am at the Shepparton Swans Football Club to hear feedback on what the mandatory code should include.
■Farmers and processors can provide feedback by calling 1300 044 940, emailing email@example.com or visiting the website: haveyoursay.agriculture.gov.au/dairy-code-conduct