Minister backs the code
FEDERAL Agriculture Minister David Littleproud has backed dairy farmers’ call for a mandatory code of conduct to improve contracting practices between farmers and processors.
Mr Littleproud said he would “work with farm groups to get this code right”, after peak lobby group Australian Dairy Farmers voted seven to six in favour of backing a mandatory code.
“Now that we have direction from the organisation representing dairy farmers across Australia, we can move forward,” Mr Littleproud said.
“I agree with ADF that a mandatory code must deliver coverage across the entire industry and improve bargaining power for Australian dairy farmers.
“While a mandatory code should improve bargaining power, it is unlikely to change milk prices.”
Labor agriculture spokesman Joel Fitzgibbon has already committed to introducing a mandatory dairy code if Labor is elected at the next federal election.
While majority of state dairy farmer organisations voted in favour of a mandatory code, the United Dairyfarmers of Victoria used its six votes to oppose it.
As Rural Weekly reported in May, Tasmania, NSW, Queensland, South Australia and Western Australia have long backed a mandatory code but faced stiff opposition from processors, especially New Zealand processing giant Fonterra.
Processors and the United Dairyfarmers of Victoria have repeatedly argued a mandatory code would take up to five years to develop, be costly and impose significant costs on farmers.
However an examination of mandatory codes, developed by the Federal Government and policed by the Australian Competition and Consumer Commission, shows that most take between 12 and 18 months to develop.
The ACCC already oversees mandatory codes on unit pricing, franchising, oil, wheat ports, sugar and horticulture.
The ACCC has previously stated that once the Federal Government initiated a code, it would undertake a process of consultation, a regulatory impact statement would be drafted and the final code would be tabled with Parliament for 15 sitting days.
The ADF has stated the decision to back a mandatory code has been a “difficult decision and one that ADF did not take lightly”.
“There are a broad range of views within ADF’s membership and these views are deeply respected and understood,” they said.
“It’s hoped the introduction of a mandatory code will be a vital step in rebuilding trust and confidence along the dairy industry supply chain.”
The ADF stated a future mandatory code must:
● Include an independent dispute resolution procedure, with small claims to be investigated
● Outlaw retrospective milk price step-downs
● Enforce contract and price transparency
● Be reviewed within three years, including an assessment of the code’s effectiveness.
The ACCC will police the code, which will be developed in consultation with the industry and as a matter of course will undergo a regulatory impact assessment and regular review.
IN FAVOUR: Minister for Agriculture and Water Resources David Littleproud in the press gallery at Parliament House in Canberra. He has backed calls for a mandatory code of conduct between farmers and processors.