Mandatory code on the horizon for dairy farmers

Australia’s struggling dairy industry will be bound by a new code in the new year, aiming to improve the bargaining position of farmers when negotiating contracts with milk processors.

Federal Agricultural Minister Bridget McKenzie confirmed last Friday the code of conduct will be in place in January — six months before its original deadline.

The mandatory code, which will replace the existing voluntary code, intends to improve farmers’ ability to switch processors and negotiate better deals.

WAFarmers dairy president Michael Partridge said the move was welcomed, but not a silver bullet to solve the dairy sector’s woes.

“It is unlikely the mandatory code will bring value to the supply chain,” he said.

“But, it should help with contract negotiations between farmers and processors going forward.”

The announcement came after Senator McKenzie met with South West dairy farmers at the Partridge family’s White Rocks Dairy in Brunswick earlier this month.

The code was a key recommendation in the Australian Competition and Consumer Commission’s dairy inquiry following the global dairy oversupply in 2016.

It will cover about 87 dairy processors and 5800 dairy farmers nationwide.

Senator McKenzie said the code would “provide clearer safeguards” for how dairy farmers are treated by milk processors.

“The dairy industry is on notice to make sure that the contracts offered to farmers are appropriate and fair ahead of its formal introduction — the community expects no less,” she said.

“I expect dairy processors to keep the exposure draft in mind when developing new contracts with dairy farmers in the coming months.”

National Farmers’ Federation president Fiona Simson said the mandatory code was an important measure to strengthen the dairy industry.

“Dairy farmers are in challenging times,” she said.

“The introduction of a mandatory code of conduct is a priority.”