The Chronicle

Dairy code ensures fair, transparen­t contract

- Kath Sullivan news@ruralweekl­y.com

❝contractin­g

We believe the code will improve

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

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.

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

Newspapers in English

Newspapers from Australia