Fair pric­ing aim of new Code of Prac­tice

Dairy News Australia - - NEWS -

THE FIRST Dairy In­dus­try Code of Prac­tice for milk con­tracts aims to en­sure greater trans­parency and fair­ness in milk sup­ply and pric­ing.

The vol­un­tary code of prac­tice was launched by the Aus­tralian Dairy In­dus­try Coun­cil – the joint body rep­re­sent­ing farm­ers and pro­ces­sors – late last month af­ter months of con­sul­ta­tion.

ADIC said it is an­tic­i­pated most of the milk fresh pro­duced in Aus­tralia will be cov­ered by the Code of Prac­tice, with the vast ma­jor­ity of pro­ces­sors hav­ing signed up to it.

Although the Code is vol­un­tary, it is de­signed to set out min­i­mum good prac­tice in terms of dairy con­tracts and will help en­sure that sup­ply agree­ments and con­tracts com­ply with the Un­fair Con­tracts law that came into ef­fect in 2016.

The un­fair con­tracts leg­is­la­tion ex­tends ex­ist­ing pro­tec­tions against un­fair con­tract­ing prac­tices for consumers to small busi­nesses and is a prac­ti­cal step, that when cou­pled with the dairy in­dus­try Code of Prac­tice, will pro­vide dairy farm­ers with fairer and more trans­par­ent con­tracts.

ADIC In­terim Chair and WCB di­rec­tor, Terry Richard­son, said the Code would ad­dress a range of con­trac­tual is­sues which farmer or­gan- isa­tions have been try­ing to ad­dress and rec­tify for years.

The code will in­clude the fol­low­ing pro­vi­sions:

A clear price or sched­ule of prices that will ap­ply to sup­pli­ers (based on elements such as vol­ume, qual­ity and com­po­si­tion);

There will be no price change ret­ro­spec­tively;

An en­ti­tle­ment for farm­ers to ac­crue loy­alty pay­ments where they have sup­plied to the end of a con­tract term, ir­re­spec­tive of whether they stay sup­plier af­ter their con­tract ex­pires

A 90-day writ­ten no­tice pe­riod if a pro­ces­sor de­cides not to of­fer farm­ers on fixed term con­tracts a fur­ther fixed term Abil­ity for farm­ers to sup­ply ad­di­tional milk to other pro­ces­sors if the pri­mary pro­ces­sor does not wish to pur­chase ad­di­tional milk

The Code will be mon­i­tored closely by all par­ties to en­sure its in­tent is up­held, with a re­view in one year.

“The Code will give farm­ers, or their rep­re­sen­ta­tive, the op­por­tu­nity to have a stan­dard form con­tract or sup­ply agree­ment which bet­ter re­flects a bal­anced sup­ply chain ap­proach be­tween farm­ers and pro­ces­sors and not sim­ply an agree­ment which is a ‘ take it or leave it’ ap­proach to a farmer’s milk sup­ply ar­range­ments,” Mr Richard­son said.

Dairy Con­nect CEO Shaughn Mor­gan said that on first-read­ing the Code ap­peared to be a good first step on set­ting out guide­lines for com­mer­cial ar­range­ments be­tween value chain stake­hold­ers in the dairy in­dus­try.

“The only caveat from our point of view at this stage is that it would be the ap­pli­ca­tion of the Code and how it was in­ter­preted that would be its true test in the mar­ket­place,” he said.

Lobby group Farmer Power had no in­put into de­vel­op­ment of the Code.

It said on ini­tial ob­ser­va­tion, that be­cause the Code is not manda­tory, it is “there­fore fairly mean­ing­less”.

“If a pro­ces­sor doesn’t com­ply with the Code, there is lit­tle that can be done about it,” the lobby group said.

“So the Code is re­ally an in­di­ca­tion of what pro­ces­sors might do to im­prove their prac­tices at some un­spec­i­fied time in fu­ture, if they feel like it.

“If this is the in­dus­try’s best at­tempt at re­build­ing trust be­tween farm­ers and pro­ces­sors then it falls well short.

“How­ever if the ACCC can use the doc­u­ment as a ba­sis for a in­tro­duc­ing a manda­tory en­force­able code, then it won’t have been a waste of ef­fort.”

It’s thumbs up from Fon­terra em­ployee Neil Bick­er­staffe as the first block of ched­dar cheese rolled off the line at Fon­terra’s brand new $140 mil­lion Stan­hope cheese plant. It marks the re­turn of ched­dar to the site for the first time since a...

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.