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Mandatory Dairy Code of Conduct to help dairy farmers get a fair price

Australian dairy farmers now have a tough and fair Dairy Code of Conduct, which will help them negotiate a fair price for their product, and will take effect from 1 January 2020.

Liberal Senator for Victoria, Sarah Henderson, said Australia’s dairy farming organisations have worked hard to develop a Code that would support dairy farmers right 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,” Senator Henderson said.

“The final Code is different from the draft that was consulted on and is now a stronger, clearer document that delivers the protections it should for dairy farmers.

“In line with feedback received from dairy farmers the Code prohibits retrospective pricing step downs. It also prevents unilateral changes except in a narrowly defined set of emergency circumstances; it stops processors withholding loyalty payments from farmers who are changing processor; and it prohibits exclusive supply arrangements where other conditions would be to the detriment of dairy farmers.

“It also establishes a dispute resolution process, increases the powers of the Australian Competition and Consumer Commission in the space and introduces civil penalties.

“Our dairy farmers are under real and sustained pressure because of the drought, high input costs for electricity, fodder and water, and a power imbalance in negotiating a fair farmgate price from processors. That’s why our government took a $22 million package of support measures to the election.”

“The Liberal and Nationals Government is making $10 million in grants available to upgrade or invest in energy efficient equipment to reduce dairy farmer energy costs and we’ve invested $8.1 million in additional funding to the ACCC’s Agriculture Unit and established a dairy specialist. The recent finding against Coles’ concerning its branded two and three litre milk is a demonstration of that at work.”

“We have also delivered $1.5 million to provide dairy farmers with contracting and legal advice including $560,000 to design, develop and test new milk pricing and trading concepts and we’ve provided $3 million in grants to support farmer groups to set up farm cooperatives and other collective business models.”

These measures, combined with our drought support measures are a comprehensive approach to achieving a viable future for Australia’s dairy farmers.

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