Dairy code en­sures fair, trans­par­ent con­tract

The Northern Star - Northern New South Wales Rural Weekly - - News - Kath Sul­li­van news@ru­ral­weekly.com

FARM gate milk prices won’t be changed ret­ro­spec­tively, and farm­ers will be en­ti­tled to sell ex­cess milk to other pro­ces­sors un­der a new vol­un­tary code of prac­tice for dairy com­pa­nies.

The Aus­tralian Dairy In­dus­try Coun­cil launched the Dairy In­dus­try Code of Prac­tice for con­trac­tual ar­range­ments be­tween milk com­pa­nies and farm­ers.

Dairy gi­ants Mur­ray Goul­burn and Fon­terra have joined Bega, Lion, Burra Foods, Free­dom Foods, and Aus­tralian Con­sol­i­dated Milk, Warrnambool Cheese and But­ter and state farmer bod­ies from all dairy states as sig­na­to­ries to the code of prac­tice.

The code sets out clear guide­lines re­gard­ing pric­ing struc­tures, loy­alty pay­ments and dis­pute res­o­lu­tion and will cover most of the milk pro­duced in Aus­tralia.

“To fur­ther aid trans­parency it is im­por­tant that con­tracts are fair, sim­ple, re­al­is­tic and eas­ily un­der­stood by both par­ties,” the code states.

The code ap­plies to stan­dard form con­tracts be­tween pro­ces­sors and farm­ers, but does not pre­clude a farmer from ne­go­ti­at­ing an in­di­vid­ual con­tract with a pro­ces­sor.

“We be­lieve the code will im­prove con­tract­ing ar­range­ments be­tween farm­ers and pro­ces­sors and of­fer greater trans­parency through ear­lier and clearer pric­ing sig­nals for farm­ers, which means less risk for farm­ers and more bal­ance along the sup­ply chain,” ADIC deputy chair­man Grant Crothers said.

ADIC said the code would en­sure:

No ret­ro­spec­tive changes to the milk price. Farm­ers re­ceive full en­ti­tle­ments, in­clud­ing loy­alty pay­ments.

Farm­ers have per­mis­sion to sell ex­cess milk to an al­ter­na­tive fac­tory if the pro­ces­sor to whom he or she is con­tracted does not want to pur­chase ad­di­tional milk.

Fon­terra’s man­ag­ing di­rec­tor Rene De­doncker said the com­pany was al­ready tak­ing steps to im­prove the pric­ing sig­nals for farm­ers.

“We’re com­mit­ted to en­sur­ing Aus­tralian dairy is sus­tain­able and to work­ing col­lab­o­ra­tively with all those in­volved in it,” Mr De­doncker said.

The code was es­tab­lished with in­put from state farmer rep­re­sen­ta­tive groups, pro­ces­sors, the Small Busi­ness and Fam­ily En­ter­prise Om­buds­man Kate Car­nell and Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion com­mis­sioner Mick Keogh.

The code will be re­viewed after one year.

❝ We be­lieve the code will im­prove con­tract­ing ar­range­ments be­tween farm­ers and pro­ces­sors and of­fer greater trans­parency through ear­lier and clearer pric­ing sig­nals for farm­ers, which means less risk for farm­ers and more bal­ance along the sup­ply chain — Grant Crothers

PHOTO: FILE

CHANGE: Dairy gi­ants, in­dus­try groups and farm­ers have signed a new code of prac­tice.

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