Press on with the Mandatory Code, says Dairy Connect

Advocacy group Dairy Connect today welcomed the announcement of the Federal Agriculture Minister David Littleproud that the Federal Government was committed to enacting a Mandatory Code of Conduct for dairy.

The Code will seek to outlaw milk processor business practices at play today which impact adversely on the day-to-day business of dairy farming.

CEO Shaughn Morgan said that he agreed with the Minister’s observation that a code wouldn’t fix the industry’s woes but it was ‘a good first step’. It will begin the process of robust discussion between dairy farmers & processors to seek a fair farmgate price.

“Now is a good time for dairy industry stakeholders and government to begin finalising the contents for the mandatory code, due to be enacted on 1 July 2020” Shaughn said.

The mandatory code of conduct would:

  • Outlaw retrospective price cuts to dairy farmers;

  • Outlaw mid-season price cuts except in exceptional circumstances;

  • Outlaw exclusive contracts which stop farmers selling their excess milk to other processors;

  • Outlaw two-tier pricing which allowed processors to pay different amounts for milk supplied by the same farmer; and

  • Outlaw processors withholding ‘loyalty payments’ if farmers moved to other processors - allowing producers to sell their milk to the highest bidders.

Shaughn Morgan said Dairy Connect would continue to work closely with the Federal Government to progress the Mandatory Code of Conduct. Dairy Connect will also lobby for the Code to have provisions relating to milk testing/calibration & ‘milk swaps’. Dairy Connect looks forward to reviewing the draft Code.