News

National code not ready: Dairy Connect

By Dairy News

The most recent publicly released draft of the proposed national dairy code is manifestly different to the draft that was released prior to the last federal election, according to lobby group Dairy Connect.

Chief executive Shaugn Morgan said the new draft contained revised and additional clauses that were not even considered from the last round of consultation.

“We need to start to restore the trust that has been lost as a result of the actions of Murray Goulburn and Fonterra clawback in 2016,” Mr Morgan said.

“More recently this has continued with low farm gate prices and unfair milk supply agreement by processors.”

Mr Morgan said there were numerous problems with this mandatory code.

“They range from poor drafting, unnecessarily complex clauses and not being clearly stated in ‘plain English’.

“There are substantial changes to the draft code (from the previous draft) and the impact that these changes have upon milk supply agreements,” Mr Morgan said.

“For instance, the previous code provided for no unilateral changes to milk supply agreements.

“Now we find that processors can unlaterally change the agreements if what occurs is ‘beyond their reasonable control’. This phrase is also used in the clause dealing with retrospective step downs. Given this is not defined, what does this even mean? It is too broad and certainly unfair to dairy farmers. It needs to be changed.”

Mr Morgan said if this draft code was in place in 2016, this could have resulted in the Australian Competition and Consumer Commission not being able to take action against Murray Goulburn for “the horrendous mistakes they made back then”.

“If they argued at that time their actions were ‘beyond their reasonable control’ they could have escaped prosecution. How could this even be considered fair?” Mr Morgan said.

He said other issues were the cooling off period, exclusivity clauses, unfairness in the penalties that could be imposed on dairy farmers and other serious difficulties the draft code puts forward, including a dispute resolution scheme that he has heard was put “up to fail”.

He urged Federal Minister for Agriculture Bridget McKenzie to buckle down and restore the code back to the nine principles that were enunciated by dairy farmers during the last round of consultation and agreed to by the Federal Department of Agriculture.