No more crying over cheap milk

DAIRY farmers will be told what they will be paid over the life of their contract in a bid to provide certainty and bargaining power as the Federal Government moves to help end the milk wars.

Agriculture Minister Bridget McKenzie will today unveil a new dairy code of conduct that stops short of ordering a floor price or "fair farm gate" price but forces processors to be more transparent.

It also prevents processors from reneging on what they agreed to pay farmers for their milk. Processor Murray Goulburn in 2016 shocked farmers when it retrospectively reduced what it had agreed to pay its milk suppliers.

The new code, which was recently rewritten after a backlash from some producers, is unlikely to stop some dairy farmers from selling up or walking away from their businesses as they continue to sell their milk at a loss.

Senator McKenzie told The Courier-Mail the code was not a "silver bullet", but the measurers would help farmers get fair prices.

There are eight dairy regions across Australia, which have unique challenges.

Victoria has more processors but in Queensland some producers have just one, meaning they have less bargaining power.


Agriculture Minister Bridget McKenzie
Agriculture Minister Bridget McKenzie


The final code:

* Prohibits retrospective price downgrades;

* Prevents unilateral changes agreed to between farmer and processor except in a narrowly defined set of emergency circumstances;

* Stops processors withholding loyalty payments from farmers who are changing processors;

* Prohibits exclusive supply arrangements where other conditions would be to the detriment of farmers

* Establishes a dispute resolution process, and

* Increases the powers of the consumer watchdog and introduces civil penalties.

The new code will start next month, but all contracts will have to be code-compliant by 2021.

The new code is unlikely to supported by One Nation or Labor, which had argued for the need for a minimum farm gate milk price.

It has been more than a year that the Australian Competition and Consumer Commission

recommended a mandatory code of conduct for the dairy industry.

Senator McKenzie will meet with dairy farmers today.

"Australia's dairy farmers now have a tough and fair rule book to help negotiate a fair price for their product,'' she said.

"It has been important for state dairy farming organisations and dairy farmers, from across our eight unique dairy regions, to detail the protections needed and to agree what is, and what is not, acceptable conduct in negotiations and in contracts.

"The final code is different from the draft that was consulted on and is now a stronger, clearer document that delivers the protections it should for dairy farmers.

"While the mandatory Dairy Code is an important step forward for our dairy farmers in protecting their interests it will not be a silver bullet for all the difficulties they are facing."

The draft code angered farmers because it did not address contract issues, which locked them in to deals but allowed processors to change what they would pay each year.