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.
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.
The Code is the result of extensive industry consultation.
“Dairy farmers all have slightly different challenges and adequate consultation was necessary to ensure the Code as far as possible, addressed the needs of all farmers,” NFF President Fiona Simson said.
“We congratulate Australian Dairy Farmers and state dairy farming representatives for engaging with the lengthy but necessary consultation process.
“The end result is a Code that safeguards farmers, while not stifling competition.”
Ms Simson also acknowledged the Federal Government and Agriculture Minister, Bridget McKenzie for their commitment to seeing these important safeguards to fruition.
The Code is a result of the 2018 Australian Competition and Consumer Commission (ACCC) Dairy Inquiry which highlighted the bargaining imbalance between farmers and processors.
Ms Simson said a fairer deal would no doubt be welcomed by farmers, many who were under immense pressure from the enduring drought.
“The drought has further tightened the pinch on the already-tight margins of dairy farmers.
“The price of water and grain has risen sharply in the past 12 months. Getting a fair price for milk, has never been more critical for the dairy sector.”
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.