The milk payment system that allowed Murray Goulburn and Fonterra to last year slash prices and claw back milk payments from farmers copped a blast from the Australian Competition and Consumer Commission (ACCC) chairman in Warrnambool on Monday.
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Speaking after an ACCC forum with south-west dairy farmers, Rod Sims said the price cuts and payment clawbacks last May had “blown up” the milk cooperative system.
Mr Sims said the dairy processors’ actions had imposed “all the risk” on their farmer suppliers.
“That is not an even system,” Mr Sims said.
He said the ability of dairy processors to change the price paid to suppliers during the milk season was an issue that needed to be urgently addressed.
Mr Sims said the ACCC would also look at whether dairy farmers needed a more transparent milk pricing system that would allow them to easily compare the prices being offered by processors.
Dairy farmers told the ACCC the complex payment structure by processors, and the little time they had to compare prices before the next milk season started, left them at a disadvantage.
Mr Sims said a separate investigation by the ACCC into whether processors engaged in misleading or unconscionable conduct over last year’s retrospective payment cuts was due to hand down its findings in about a month’s time.
He said if the investigation found processors had broken laws, court action would be taken.
