Online resources making new contracts easier and more transparent

By Dairy News Australia

Dairy Australia has published a guide to assist dairy farmers with the introduction of new industry-wide milk supply agreements with processing companies, which came into effect on June 1.

A Farmer’s Guide to Milk Supply Agreements and the Dairy Industry Code of Conduct has been designed to make milk supply contract negotiations easier and more transparent.

Dairy Australia’s Trade and Industry Strategy Group manager Charles McElhone said rules around standard form milk supply agreements were part of the Dairy Industry Code of Conduct launched on January 1.

“As farmers gear up for their new season contract negotiations, for the first time they will be looking at milk supply agreements that come under the Dairy Industry Code of Conduct,” Mr McElhone said.

“Contracts might look different, some of the terminology will be different, there are new terms that have to be incorporated into agreements.

“It’s a priority for us that farmers have access to information that makes it easier to get their head around some of these changes.

“We’ve developed these resources as a practical guide for farmers to consider how a milk supply agreement aligns with their business.

“All milk supply agreements created, varied or renewed this year are subject to the code and, by January 2021, all milk supply agreements no matter when they were entered into, must be code-compliant.”

Under the code, anyone who buys milk directly from farmers — including co-operatives, retailers, brokers and other direct buyers — are defined as processors.

Some sections of the code will not apply to either a farmer or processor if a processor is a small business entity as defined by the code.

Australian Dairy Farmers and Australian Dairy Products Federation contributed to the guide, which can be used in conjunction with contract templates developed by these organisations.

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