Dairy farmers can look forward to a fairer new year and beyond with government and industry agreeing to the mandatory Dairy Code of Conduct.
Coming into effect on 1 January, the Code seeks to even the playing field between dairy farmers and processors.
The announcement is welcome news for farmers who are feeling the pressure of drought and its impact on grain and water prices.
At the heart of the Code is the prohibition of unfair contract terms, including retrospective pricing step downs and unilateral changes.
Farmers will also be protected from the withholding of loyalty payments if they decide to change processors. Exclusive supply arrangements where other terms would be to the detriment of dairy farmers, will also be prohibited.
Agriculture Minister, Bridget McKenzie said Australia’s dairy farming organisations had worked hard to develop a Code that would support dairy farmers across Australia.
“The mandatory Dairy Code of Conduct was a key recommendation from the 2018 Australian Competition and Consumer Commission (ACCC) Dairy Inquiry which found contracting and industry practices were weighted heavily in favour of processors,” Minister McKenzie said.
“That’s why it has been so important for state dairy farming organisations and dairy farmers, from across our eight unique dairy regions, to detail the protections needed and to agree what is, and what is not, acceptable conduct in negotiations and in contracts.”
The National Farmers’ Federation welcomed the Government’s announcement, saying the news was a big win for dairy farmers across Australia.
“We congratulate Australian Dairy Farmers and state dairy farming representatives for engaging with the lengthy but necessary consultation process,” NFF President Fiona Simson said.
“The end result is a Code that safeguards farmers, while not stifling competition.”
Farmers and processors have 12 months from implementation to be compliant with the Code.
Those found to be in breach of the new regulations will be subject to penalties based on respective size of the processor or farm.