Nearly 100 Gippsland farmers turned up on Tuesday to the first hearing of an Australian Competition and Consumer Commission (ACCC) inquiry into pricing and competitiveness across the dairy supply chain. That is both encouraging and worrying.
It shows our dairy farmers have faith in the competition watchdog to crack down on unfair practices in the industry.
But it also shows how widespread the problem has been for farmers affected by the milk price cuts triggered last year by major processors admitting they overpaid suppliers.
Either way, the ACCC took away a powerful message from the meeting – the major processors responsible for last year’s milk crisis must be held to account.
Farmer after farmer who spoke before ACCC agriculture commissioner Mick Keogh expressed their fear at being impacted by the infamous “clawback” clause in dairy supply contracts, which allows processors to retrieve money already paid to farmers in the event of a market downturn or shoddy internal management.
The United Dairyfarmers of Victoria (UDV) has consistently preached to government, industry and other stakeholders over the need to remove the clawback clause from dairy supply contracts.
We need a pricing system that builds resilience, not one that makes farmers more vulnerable. We want to restore confidence in the dairy industry and work towards a sustainable profitable future.
The goal is to never see a repeat of last year’s milk crisis. It’s not fair on our dairy farmers that they have to pay for the poor management decisions of the processors.
And that is what we expect to achieve with the ACCC inquiry.
This inquiry and a separate Senate inquiry into contractual fairness across the dairy supply chain are both important steps on the path to reforming the industry.
It’s absolutely vital that we uncover all the inefficiencies and inequities our dairy farmers face.
An in depth and independent inquiry will achieve a thorough and fair result.
It’s time for farmers to have their voices heard by people who have the power to recommend changes in the dairy industry.
The inquiry will head to Warrnambool on Monday, February 27 and Shepparton on Tuesday, February 28.
Adam Jenkins, UDV president
