The head of United Dairyfarmers of Victoria has denied blocking the introduction of a mandatory industry code, saying it’s committed to working towards one.
The Australian Competition and Consumer Commission has reccommmended the Federal Government introduce a mandatory industry code
The ACCC said a code could include banning retrospective step-downs in milk price, prohibiting extended notice periods being imposed on farmers wishing to switch processors, preventing loyalty payments and requiring contracts contain an independent and cost-effective dispute resolution process.
The sector’s national group, Australian Dairy Farmers, this week endorsed a mandatory code.
UDV president Adam Jenkins said his organisation had reservations about a mandatory code, but it was now time to get on and introduce one.
“I guess everyone has tried to say Victoria was blocking it,” Mr Jenkins said.
“That’s incorrect, what Victoria was committed to was reviewing the current code, which had inadequacies in it,” Mr Jenkins said.
“We certainly weren’t blocking the introduction of a mandatory code, we were putting forward issues we were concerned with.”
The ACCC flagged a mandatory code in April this year, after its into the sector inquiry found significant imbalances in bargaining power, at each level of the dairy supply chain.
He said whilst there were issues with the voluntary code, it had the advantage of getting sectors of the industry to talk to each other.
“Let’s not lose focus on what it’s all about – it’s about no more clawbacks, transparency in contracts and an independent dispute resolution system.”
Let’s not lose focus on what it’s all about – it’s about no more clawbacks, transparency in contracts and an independent dispute resolution system.
The ADF has advised the Federal Government it will support a mandatory code for processor-farmer contracts, if the rules deliver coverage across the entire industry and improve bargaining power for dairy farmers.
In May, the UDV said it was concerned a mandatory code would take years to develop, draft and register.
Mr Jenkins said the UDV still had concerns that the industry would end up with a bureaucratic system, which couldn’t be altered or was too complex for the changing environment, in which farmers operated.
“We will work constructively within the system to make sure we get the best outcome for farmers,” Mr Jenkins said.
“It is what it is, we accept that decision and are happy to work within that framework.”
A key issue still to be resolved was an independent resolution process.
“We wanted every farmer to have the opportunity to have his or her contract reviewed if they felt it was not quite right,” Mr Jenkins said.
He warned the UDV was still concerned the process had now become political.
“Be warned, this is now a political process and we have a May (Federal) election, coming up,” Mr Jenkins said.
“How long will it be before we have a code in place?”
The UDV’s position was based on what its members were asking.
“We represent our members,” Mr Jenkins said.
Processors have rejected a mandatory code.
South Australian dairy farmer Rick Gladigau, Mount Torrens, said the ADF’s support was important.
“I don’t really care what the numbers are that got it across the line, the fact they did it is all that matters,” Mr Gladigau said.
“Part of that is that it would have looked really silly if the ADF hadn’t supported a mandatory code and the Minister wanted one.
“If the farmers had said no, it would have looked really stupid.”
It was now up to the ADF to show leadership, in ensuring the code was implemented.
“The ADF has to realise they are there for farmers, they are the farmer’s advocacy body and they need to be working on a code that is about farmers.”
He said he’d like to see farmers given more control over where they could sell their milk, once their commitments to their main processor were met.
A code should also cover fairness in contracts, which should be easily understood.
“Contracts need to come out far earlier and be far more transparent, in their pricing.”
Mr Gladigau said he saw no reason as to why a mandatory code should not now be implemented.
“Those who don’t support it have never come out and said why they don’t.”
A voluntary code was just that.
“People can come and go, and if a processor wanted to pull out, nobody could stop them.”
South Gippsland’s Marian Macdonald said a mandatory code was an important first step on a very long path.
“I think it’s great everyone seems to be backing a mandatory code,” Ms Macdonald said.
But it was not designed to bring profitability back to the sector.
“It can’t do that.”
She said it was clear, from surveys, farmers wanted a mandatory code.
“I don’t know why it’s taken so long to catch up with the ordinary farmer,” she said.
“The bottom line is that it has to look after both the farmer and processor and introduce a degree of transparency.
“The most important thing that was missing with the voluntary code was that everyone acknowledged there were no consequences for breaches.”
It was important farmers were properly consulted and their views are taken into consideration.
UDV Wannon branch vice president Casey Taylor said the code would set a consistent set of ground rules around the notice given, on supply and price changes.
He said it was now in the Federal Government’s hands.
“I can’t see why it can’t be adopted,” Mr Taylor said.