Senate told how to right the wrongs in the dairy industry

By Jamie Salter

NSW Farmers presented at a hearing for the Senate inquiry into the ‘Performance of Australia’s dairy industry and the profitability of Australian dairy farmers since deregulation in 2000'.

One June 19, NSW Farmers used the hearing to highlight possible solutions for a sustainable and profitable dairy industry, including fairer supply chains, reasonable retail pricing on dairy products and an effective industry restructure.

NSW Farmers Dairy Committee chair Colin Thompson said the lack of genuine competition in the dairy supply chain had constrained the industry’s profitability over the past decade.

“Unlike in other industries, dairy farmers have not reaped the benefits of a competitive market,” Mr Thompson said.

“Retail prices do not reflect normal market conditions — while most food items have become more expensive with consumer price index, milk prices have remained consistently low.”

Mr Thompson said major retailers needed to be held accountable for irresponsible pricing on dairy items.

“We need to see unconscionable conduct provisions in Australian Consumer Law strengthened,” he said.

“A specific fairness provision should also be incorporated into our national competition framework to help rectify the power imbalances present throughout the supply chain.”

Mr Thompson said he welcomed the mandatory Dairy Code of Conduct, but it was too early to know whether it would deliver meaningful change.

“The mandatory code of conduct is designed to equalise power imbalances between farmers and processors.

“Greater resourcing of the ACCC’s agriculture unit could help see the intent of the mandatory code come to full fruition, especially in the event the ACCC takes legal action against processors.

“It is also critical that the dairy industry restructure process happening now at a federal level does not stall, as it is a crucial opportunity to provide options for genuine reform for the industry.”

Mr Thompson said different avenues needed to be explored to ensure dairy farmers were paid a fair price for their product.

The Senate inquiry focuses on the independence and funding of Dairy Australia, the accuracy of data collected by Dairy Australia and the Australian Bureau of Statistics, the introductory of the mandatory Dairy Code of Conduct and alternative approaches to supporting the dairy sector.

The inquiry also assesses the benefits of tasking the ACCC to investigate how it can regulate the price of milk per litre paid by processors to dairy farmers.