Farmers worried about code

By Jeanette Severs

DAIRY FARMERS are being expected to vote for a compulsory industry code without consideration for alternatives, nor the impact on their businesses.

That was the concern expressed at the final consultation meeting, at Maffra in Victoria’s Gippsland region, in late November.

However, with less than five per cent of dairy farmers likely to participate in the national consultation meetings, many of those at Maffra questioned whether the feedback was relevant.

There were about a dozen dairy farmers at the Maffra meeting, many of them UDV delegates, plus industry advocates and disrupters.

The Federal Government intends to shape a standard contract, which would have to be available on processors’ websites, as an industry example and legislate for transparency around processors’ prices and agreements with dairy farmers.

Some of the attendees were concerned about the support for dairy farmers.

“What is the purpose of the code, is it about building equity for dairy farmers and communities?” asked Christos Iliopoulos, of Farmers Advocate Support Team.

The Australian Competition and Consumer Commission and the Federal Government have expressed concerns about a lack of bargaining power for dairy farmers.

However, Jeannette Howie, a dairy farmer at Denison, disputed this claim.

“Developing a code needs to be 100 per cent processor and farmer-driven, not government-led,” she said.

“We have bargaining power. We can phone around different processors and negotiate for the best price.”

Step-downs were a particularly confusing discussion at a number of meetings, with contention about whether step-downs should be outlawed or only allowed in extreme circumstances — such as the Global Financial Crisis — a hotly contended issue at the Shepparton consultation.

Attendees at the northern Victoria session were strongly against the introduction of a mandatory code, with a majority of the 20 dairy farmers not supportive of the measure.

“No mandatory code, full stop,” Cobram East dairy farmer Paul Mundy said.

Many in the room felt there should be greater attention given to improving the voluntary code before locking themselves in to a legally binding code whose costs were unknown and would take “years” to change through parliament.

The vast differences between Australia’s dairy regions were discussed several times at the meetings, with conversation often centred around Queensland and Western Australia dairy farmers and how different it was, in particular in WA, where there was no processor competition.

Meanwhile dairy farmers in states like Victoria and NSW have multiple processors to trade with, a strength in competition that is not replicated across the nation.

The capacity of dairy farmers to exit a contract was also under question, with some attendees wanting to be able to break a contract with 30 days’ notice.

UDV vice-president Paul Mumford said contracts needed to be easy to understand and not dependent on literacy or the capacity to pay for legal representation.

“We have a lot of mum and dad dairy farmers and they shouldn’t have to seek a legal opinion to understand a contract,” he told the Maffra meeting.

Mr Mumford was also concerned about how hidden costs would be passed from the processor to the dairy farmer and if a code was the mechanism to identify that risk.

The government is engaging with all state dairy organisations, all processors and other representative groups, such as Farmer Power, during the consultation period prior to drafting a mandatory code.

Whereas a draft mandatory code was expected to be available soon, it now appears unlikely to be available before 2019.

Dairy farmers wishing to have their say can do so by emailing or phoning 1300 044 940.

The Federal Government is also considering a facilitated telephone question-and-answer session, with further face-to-face consultation meetings also being considered following the release of a draft of the mandatory code of conduct.

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