Step-downs, claw-backs and a fair price
With anger still seething from the 2016 milk price claw-back, it was no surprise that step-downs dominated the conversation at a consultation meeting about the mandatory code of conduct in Shepparton last Tuesday.
With all options on the table, the 40-strong crowd were pressed on their preference for whether a code should outlaw step-downs all together, or allow a ‘get out of jail’ step-down for extreme instances — such as the Global Financial Crisis.
Run by the Federal Department of Agriculture and Water Resources, the facilitator of the meeting cautioned that outlawing step-downs could result in a more conservative opening price and, if a repeat of the GFC occurred, the law wouldn’t allow processors to reduce their milk price, forcing them to shut their doors and leave many dairy farmers looking for a home.
‘‘We’re still stuck in a mindset and trying to guess what the future might be like,’’ Katunga dairy farmer Daryl Hoey said.
For Katunga dairy farmer Bridget Goulding, it ultimately comes down to dairy companies offering a fair price, calling on processors to ‘‘behave’’.
Concerns were only further exacerbated by the question of who would have to pay for the implementation of the mandatory code of conduct.
Although costs are expected to be minimal, a price tag has yet to be put on the potential code.
‘‘This is all because Murray Goulburn and Fonterra did what they did . . . Are farmers going to have to foot the bill (for the code)?’’ Ms Goulding questioned.
The lack of clarity surrounding what a code will entail and the specific issues — including the possibility of not requiring exclusive supply under a standard contract, implementing cooling-off periods if step-downs are put in place and potential exemptions and penalties — all continued to be question marks for many in the room.
The accessibility and costs of settling contract dispute through dispute resolution methods were also a point of concern.
Under the Horticulture Code, the cost of entering into dispute resolution is as much as $330/hour, a figure farmers said could not afford to be replicated under the dairy code.
‘‘It’s more money that farmers literally can’t come up with,’’ Ms Goulding said.
Ultimately, farmers said they could offer little in the way of suggestions or advice moving forward without a draft document to work off.
‘‘This has been completely and utterly rushed and is just a brain fart,’’ Cobram East dairy farmer Paul Mundy told the room.