Consultations on the proposed code were convened last month throughout Australia by the federal agriculture department including a session at Camperdown on November 26.

The move for a mandatory code of conduct follows a number of inquiries into the dairy industry, the most recent by the Australian Competition and Consumer Commission (ACCC). 

The ACCC proposed the mandatory code of conduct to address “the inherent bargaining power imbalance” between dairy farmers and dairy processors. 

Federal agriculture minister David Littleproud and Member for Wannon Dan Tehan have encouraged dairy farmers to have input into the consultations on the proposed code so the power imbalance can be addressed.

Among the numerous issues raised in the consultations was a call for a standard form contract that would prevent exclusive supply and two-tier pricing applied together, giving farmers the ability to negotiate additional clauses beneficial to both parties.

On the issue of contract termination, it was proposed there be a 30 day notice period for termination when a contract was coming to an end by either party or by farmers after a step down. Some farmers also proposed there should not be a notification period from farmers if they wanted to leave a processor.

Another proposal was for a dispute resolution process with the ACCC to handle all disputes and the cost of entering dispute resolution remaining a business decision. The ACCC has said the code should contain penalties with the highest penalty being for breaches of good faith.

Strong sentiments were expressed by some during the consultation against the code being mandatory. There were concerns that without details on what would be in a code, it was hard to justify the code being mandatory.

It was also argued there was existing legislation regulating the behaviour of businesses that could be utilised.