Price cut pro­tec­tion for dairy farm­ers with new code

Townsville Bulletin - - NEWS -

THE dairy in­dus­try has in­tro­duced a new code of prac­tice aimed at pro­tect­ing farm­ers from ret­ro­spec­tive cuts to milk prices and en­sur­ing pro­ces­sors give sub­stan­tial no­tice of any loom­ing price re­duc­tions.

The vol­un­tary code, launched yes­ter­day by peak na­tional dairy farm­ers group, the Aus­tralian Dairy In­dus­try Coun­cil comes af­ter the dairy in­dus­try was plunged into chaos in April, 2016 when Aus­tralia’s big­gest dairy pro­ces­sor, Mur­ray Goul­burn, un­ex­pect­edly slashed the far­m­gate milk price, cit­ing global over­sup­ply and low prices for dairy com­modi­ties.

Mur­ray Goul­burn also in­tro­duced a con­tro­ver­sial sup­port pack­age for dairy farm­ers which clawed back re­pay­ments out of fu­ture pay­ments for milk – a scheme it later dropped. Mur­ray Goul­burn, Fon­terra Aus­tralia, Bega and War­rnam­bool Cheese & But­ter are among pro­ces­sors signed up to the new code and ADIC deputy chair Grant Crothers said the code would cover most of the milk pro­duced in Aus­tralia.

“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,” Mr Crothers said.

The code re­quires farm­ers be given 30 days’ no­tice of any cut in milk prices and al­lows farm­ers to sell ex­cess else­where if their pro­ces­sor does not want the ex­tra sup­ply. The code cov­ers stan­dard con­tracts be­tween pro­ces­sors and farm­ers but does not pre­vent a farmer from ne­go­ti­at­ing a con­tract with a pro­ces­sor.

Fon­terra Aus­tralia has en­dorsed the code, say­ing it al­ready was tak­ing steps to im­prove pric­ing sig­nals to give farm­ers more cer­tainty and help them plan.

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

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.