News and Views

Latest draft of the Mandatory Code of Conduct still leaves dairy farmers high and dry

dairy worker stock image

Individual farmers and key industry organisations within the dairy industry were called upon to provide feedback on the Exposure Draft of the Mandatory Code of Conduct for the Dairy Industry.

Putting it bluntly, the initial intent of the Code has been significantly watered down in the interests of processors over farmers in this draft. The intent to address the imbalance of power between farmers and processors will not be achieved with this watered-down code.

While many core issues have been addressed, there are still 3 primary areas that specifically concern farmers in the Queensland dairy industry not covered or remedied by the Code.

These include:

  1. the disparity between the contract period (usually 3-5yrs) and fixed pricing period (usually 12 months only);
  2. exclusivity clauses are still allowed/are a part of contracts between processors and farmers;
  3. that the Code cover the conduct of Retailers in the dairy industry value chain.

QDO and several other industry bodies have consistently requested these areas be addressed in a manner that is fair and reasonable and provides adequate protection to the dairy farmers but has been consistently met with dismissal from those responsible for the drafting of the Code. A point in case is that there is almost no chance that the third point listed above, will be considered for inclusion in the Code.

Given the significant problems with the code, it would seem very ambitious to try and rush it and implement it on 1 January 2020. We need to also ensure that contracts signed before the commencement date are also compliant.

QDO has been open and transparent regarding the Code – both its benefits to the industry and the flaws with its current drafting. We will continue to advocate for its acceptance by our members once the areas of concern outlined above have been properly addressed.

We strongly urge that while the Code remains in draft format, farmers should consider what is fair and reasonable in their contract term for their own circumstances before signing and be prepared to ask for changes.

Source: QDO President – Brian Tessmann

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