Dairy supply chain information goes digital

Agriculture minister David Littleproud said the government was funding enabling greater efficiency and transparency.

"These grants to Australian Dairy Farmers and Dairy Australia are designed to help farmers make better decisions using better price and market information," Mr Littleproud said.

ADF policy director Craig Hough said the fundamental purpose of the grants was improving price transparency, based on recommendations in the Australian Competition and Consumer Commission's Perishable Goods Inquiry.

"It's essentially digitalising the supply chain," Mr Hough said.

"We also need to speak to retailers, processors and farmers again and do a lot more deep dive into the 'how' as to implementation of the traceability guidelines, including tracking price.

"We want to develop a technology roadmap, where we can harmonise and standardise technology, to make sure the product and price can be a lot more transparent and visible in real time."

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Processors opening prices often included caveats like penalties, incentives and loyalty payments.

"It's trying to look at those power imbalances and market failures the ACCC identified in its reports - we are changing the game around that to make it a more equal and fair approach."

He said farmers still had issues around prices the retailers were paying processors for milk, and other dairy products.

"They want to see that those prices and profits and the value distribution back up the chain are fair and equitable.

"Farmers will get a lot more visibility on things, - rather than having the ACCC inquiry which subpoenaed commercial-in-confidence data, they can see some of these things happening on a dashboard.

"There is obviously some commercial in confidence stuff in here, so we don't want to do it at an individual (processor) level - it will be more aggregated at an industry and regional level."

It would expand on the information currently contained on the milk price portal.

Funding would also be used to improve food safety and be coupled to two-dimensional bar-coding, similar to that currently being rolled out by Woolworths.

"This 2-D barcode pinpoints a specific batch where there are issues so you can kill that batch off, rather than kill the whole range."

Farmers were still doing a lot of manual data entry, which the upgraded systems was intended to overcome.

"There are a lot of Xcel spreadsheets and pdf's getting thrown around the place, we want to get rid of a lot of that stuff.

"By digitalising it, you make it more efficient and then you recover costs, which helps with investing in better technology, pricing and profit, across the chain."

Mr Littleproud said it was intended to use technology to speed up the 'feedback loop' on product and price movement.

That included processes like milk test results, which was not only valuable feedback for the farmer, but also had the potential to speed up payments.

"Processors will know exactly how much milk is at each farm, which will assist with logistics and milk payments," he said.

"A $220,000 grant to Dairy Australia will see the delivery of face to face and online workshops across all eight dairy regions to build knowledge and understanding of the dairy market and the tools available to farmers to maximise value from their milk, supporting better business and risk management."

The projects are supported by Australian Dairy Farmers Ltd, the Australian Dairy Processors Federation and Dairy Australia.

ADF chief executive David Inall said the grants would help realise the inaugural five-year Australian Dairy Plan, informed by nationwide consultation involving more than 1,500 participants.

"One of the plan's objectives captures the goals of both grant agreements - for organisations to restore trust and transparency between farmers and processors to strengthen industry confidence," Mr Inall said.