NSW Farmers welcomes government support for dairy mandatory code of conduct 

NSW Farmers’ Association has welcomed this week’s announcement from Minister Littleproud supporting a mandatory code of conduct for the dairy industry that would deliver stronger market power for farmers during negotiations with processors.

NSW Farmers’ Dairy Committee Chair Erika Chesworth said that farmers needed to be treated fairly by both retailers and processors, and that action in only one of these areas would have limited gains. 

“The actions required to address farmers’ relationship with processors were clearly listed in the recommendations from the Australian Competition and Consumer Commission (ACCC) dairy inquiry.

“We strongly support all eight recommendations made by the ACCC. The inquiry identified unacceptable power imbalance between farmers and processors, and industry should be addressing these issues as a matter of urgency.”

NSW Farmers’ Association says farmers need transparent minimum contract standards with legal protections, enforcement capabilities and a fairer allocation of risk between processors and farmers. 

“A mandatory code will deliver this to farmers in NSW,” Ms Chesworth said.

The ACCC inquiry into the dairy industry showed that the industry voluntary code was failing the industry as not all the processors were signatories and there was a lack of dispute resolution process and enforcement of the code. This situation has highlighted the need to support the recommendation by the ACCC. 

“Farmers do not have sufficient power in their dealings with processors, and this has resulted in unfair contractual terms including milk prices being imposed.

“A mandatory code has been recommended to the industry as the most effective way to address these power imbalances and produce a long term structural change to enhance competition for farmers’ milk,” Ms Chesworth said.

The ACCC recently released a factsheet to help the dairy industry understand the process and costs involved in implementing a mandatory code.

“The ACCC has clearly outlined the costs of a mandatory code for farmers and the costs are minimal; it basically amounts to simple record keeping.

“As for administrative costs, the ACCC has not imposed cost recovery measures on any industry mandatory code and have clearly stated that they would oppose the suggestion of this for the dairy industry,” Ms Chesworth said.

The code will just be an initial step and it will not be a silver bullet for dairy farmers but it will give them a base level of protection and ensure that both parties are compliant to their contract. 
Date: Thursday 13 September 2018
Media Contact:   Kathleen Curry  |  Public Affairs Director | 0429 011 690