United Dairyfarmers of Victoria (UDV) new president Paul Mumford is urging south-west dairy farmers to attend a Warrnambool forum on February 1 on the draft code of conduct for the dairy industry.
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The draft mandatory code, which was released by the federal agriculture department on Tuesday, aims to give dairy farmers more bargaining power with dairy processors.
The federal agriculture department, which developed the draft code after consultations with dairy farmers and processors, said it aimed to set rules between farmers and processors to help “rebalance the level of commerical risk that farmers face.”
Mr Mumford, who was in the south-west this week to address a UDV Wannon branch meeting, said he believed the code could prevent repeats of the 2016 turmoil in the dairy industry when Murray Goulburn and Fonterra slashed their milk prices.
The code would “help set boundaries on how farmers and processors engage,” he said.
“It will strengthen contractual agreements.”
But he said dairy farmers still had opportunities to tell the department and the industry whether the draft was appropriate for them. “We have to find out whether it will suit dairy farmers,” Mr Mumford said.
The February 1 forum, which will start at 11am at the Warrnambool Golf Club, is one of a series of three meetings to be held across Victoria that the UDV lobbied for to allow dairy farmers to provide feedback about the draft.
The draft code includes proposals for dairy processors to each year on a set date release the minimum farmgate milk price they were offering for supply agreements.
The proposal for all processors to release a standard form agreement and minimum prices at the same time aims to improve farmers’ ability to compare milk price offers and negotiate with a range of processors.
The department said standard form agreements would not mean farmers would operate under an industry-wide arrangement.
Each processor would have their own standard form agreement and farmers could negotiate terms with processors.
The draft also bans retrospective milk price step downs, a practice that caused much grief in the dairy industry when imposed by some processors in 2016 after the dairy market slumped.
Other proposals in the code are for a ban on exclusive supply arrangements and two-tier pricing and to stop processors from withholding loyalty payments if a farmer switches processors.
The draft code also calls for a dispute resolution process.