News

NSW says code ‘waste of time’

By Dairy News

PROMINENT NSW dairy farmer Adrian Drury has labelled a proposed review of the voluntary industry code of conduct as a “waste of time, resources and energy”.

Mr Drury, the acting Farmers Group President of NSW farmers lobby group, Dairy Connect, said the Australian Dairy Industry Council, which incorporates Australian Dairy Farmers and the processing sector, should back the ACCC recommendation for a mandatory code of conduct.

Mr Drury said the Australian Dairy Industry Council had “turned its back” on recommendations made by the ACCC following its 18-month probe into the dairy industry.

“The voluntary industry code currently operating has been an abject failure. It has died and should be put to rest,” Mr Drury said.

“If it was working, the industry would already have fair, balanced, plain English, milk supply agreements. It doesn’t.”

Dairy Connect CEO Shaughn Morgan said a majority of the state dairy bodies, aside from the United Dairyfarmers of Victoria, support a mandatoary code.

“So why do we need to fluff around into the future,” he said.

Mr Morgan said the Australian Dairy Industry Council’s plan to convene forums to educate farmers on how the new ADIC recommendations would be implemented was “bureaucracy gone mad”.

“The ACCC has delivered a comprehensive report into the Australian dairy industry and its eight recommendations are straight-forward and should be supported across the industry.”

The ACCC’s final report indicated that the Commission was of the view that a mandatory code of conduct was necessary for remedying the identified market failures in the dairy industry.

In its final report, the ACCC stated: The voluntary code will remain, by its very nature, an ineffective way to address problems. The process of creating a mandatory code would involve extensive industry consultation, but government involvement in the development of a prescribed code would mitigate the imbalance between processor and farmer influence.

Katunga dairy farmer and member of the ADF National Council, Daryl Hoey, believes a mandatory dairy industry code of conduct will be subject to years of red tape and delays and may not improve the position of dairy farmers.

“The voluntary one is due to go through a 12-month review and discussions with processors to strengthen the voluntary code. If that doesn’t work then we’ll have to look at a prescribed code,” Mr Hoey said.

“(The mandatory code) would be so difficult to change and that costs money and ultimately that would have to come out of dairy farmer’s milk cheques. I don’t see many advantages.”

Processors have also called for the implementation to be delayed, with Fonterra telling the competition watchdog the voluntary code must be allowed the time to work.

A number of other processors, including Lion Dairy and Drinks, expressed concerns regarding how a mandatory code of conduct would be applied to differing business styles in the industry.