Agricultural Commissioner Mick Keogh said the first meeting – which attracted about 100 Gippsland farmers - revealed a great deal of uncertainty, over supply agreements.
“We have much less specific supply agreements in place and it seems to me, the terms of those supply agreements are much less certain,” Mr Keogh said, after the meeting.
“A lot of the commentary we had was around the lack of transparency in pricing, and the difficulty in understanding exactly what price was being offered, and, in fact, when you were going to be paid that price.”
He said that was exacerbated by last year’s milk price clawback, by Murray Goulburn and Fonterra.
“A lot of the farmers expressed concern that, to their understanding, that hasn’t changed, from that event, and a lot of them said it could still happen again tomorrow.”
The Commission is hearing farmers’ views on competition between milk processors, contracting and pricing practices, retail pricing and transparency.
“There was a fair bit of expression of distrust of the processing sector, in the room, and I guess that’s understandable.”
He said he questioned farmers about how they coped with the lack of clarity, around agreements.
“It’s obvious, from the responses dairy farmers gave, a lot of them really do have difficulty in getting to the bottom of what their supply arrangements actually entail, what the price is and what the terms are, if they want to change
Marian Macdonald, a Fonterra supplier, said the inquiry was the “best shot” at change. “The ACCC needs to set boundaries what the processors can, and can’t do. Hopefully that will enable things to change, so we don’t find ourselves in the same position, in five, or ten years time,” Ms Macdonald said.
And Dollar producers Graeme Dyke, who supplies Burra, said he believed the big factories were getting too inefficient, from the farmgate to the supermarket shelf.
”I believe we are being ratted, in this industry, ratted,” Mr Dyke said. “Too much money is disappearing and we want to see what’s going on.”