Voluntary code for dairy contracts

Protection: The United Dairyfarmers of Victoria wants better contracts for dairy farmers to prevent situations such as last year's dairy crisis from reoccurring.
Protection: The United Dairyfarmers of Victoria wants better contracts for dairy farmers to prevent situations such as last year's dairy crisis from reoccurring.

A voluntary code of conduct is the favoured way to get the national dairy industry back on track following last year’s milk crisis, the United Dairyfarmers of Victoria (UDV) says.

The UDV said it had been locked in negotiations with industry groups since late last year over terms of reference for a voluntary code, with the aim that farmers would no longer bear the brunt of poor decisions made along the dairy supply chain.

UDV president Adam Jenkins said Australian dairy farmers needed to have a say in how their contracts and supplier agreements were determined and what was reasonable.

A voluntary code was integral to achieve that outcome, Mr Jenkins said.

“This has never been done before in the dairy industry,” he said. 

“The end goal is to help processors and others in the supply chain adhere to the unfair contract legislation brought in last year by the Federal Government.

The end goal is to help processors and others in the supply chain adhere to the unfair contract legislation brought in last year by the Federal Government.

Adam Jenkins

“It is vital that all players in the dairy industry meet their legal obligations,” Mr Jenkins said.

He said that commentary over the value of imposing a voluntary code of conduct compared to a mandatory code was counter-productive to solving problems across the dairy supply chain.

“What a lot of people don’t realise is that it is not compulsory to sign up to a mandatory code.

“There is no capacity to force a dairy company to sign onto a mandatory code,” Mr Jenkins said.

“It is important we have as many dairy companies as possible to sign onto the code and a voluntary code has a significantly greater chance of getting this outcome.

“Farmers and processors will be in a stronger position to apply peer pressure to ensure our industry conforms to legal requirements,” he said.

Mr Jenkins said the UDV expected a voluntary code to become part of the positive culture of the dairy sector following the dramatic milk price cuts last year.

“It’s an achievement of the dairy industry that in tough times we’ve been able to band together to come up with real solutions to improve industry practice,” he said.