Small Farms

New milk supply agreements must comply with dairy code

dairy machine stock image

Dairy farmer group Australian Dairy Farmers (ADF) is reminding farmers and processors to ensure all new milk supply agreements comply with the industry’s mandatory Code of Conduct.

The Code of Conduct, which came into effect on January 1 2020, requires most dairy processors to publish standard form milk supply agreements on their websites by June 1 2020.

A standard form milk supply agreement template, developed by ADF, was released earlier this month. The farmer group was contracted by the Federal Government to develop a template that incorporates all elements of the Code and can be used by farmers and processors in negotiating contracts.

“It is extremely important that farmers and processors comply with the Code of Conduct so that they don’t risk being penalised in a way that could jeopardise their business,” ADF President Terry Richardson said.

The Australian Competition and Consumer Commission (ACCC) is responsible for enforcing the Code and investigating alleged breaches.

The competition watchdog, in its 2018 dairy inquiry, made several recommendations related to contracting practices, including that milk supply arrangements should be acknowledged in writing, processors should provide farmers with all contractual documents before the start of their agreement, and that those agreements should be simplified.

The Code does not apply to farmers and processors with a milk supply agreement that was entered into before January 1 2020, unless that contract is varied or renewed.

All contracts, no matter when they were entered into, must be compliant with the Code from January 1 2021.

Farmers or processors can contact the ACCC on 1300 302 021 to report alleged non-compliance.

Source: ADF

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