DAIRY CODE: Advocacy group Dairy Connect said dairy farmers such as Damien Tessman will benefit from the new mandatory code of conduct which went into effect January 1.
DAIRY CODE: Advocacy group Dairy Connect said dairy farmers such as Damien Tessman will benefit from the new mandatory code of conduct which went into effect January 1.

Dairy code a ‘game-changer’

IT IS designed to provide better “price certainty” for dairy farmers and the new legislation has already drawn praise from industry leaders.

Last month, Minister for Agriculture Bridget McKenzie announced a new mandatory Code of Conduct for the dairy industry, which took effect on January 1.

NSW Farmers’ Association said the new code is designed to deliver “greater price certainty for dairy producers and to eliminate unfair practices that have impacted adversely on dairy farmers who have traditionally been ‘price-takers’.

NSW Farmers’ dairy committee chair Colin Thompson said the mandatory code is “crucial” for enhancing dairy farmers’ bargaining power with processors.

“Farmers have insufficient power in their dealings with processors resulting in unfair contractual terms being imposed,” Mr Thompson said.

“This code will start the process of rebalancing the scales and will provide a level of transparency for all farmers.”

Mr Thompson said this new code prohibits many “unfair contract elements that farmers have had to endure over many years”.

Advocacy group Dairy Connect CEO Shaughn Morgan has also praised the new code, which he called a “game changer”, and said the Australian Government was supporting the dairy industry by implementing clearer, enforceable rules about the conduct of business relationships between farmers and the first purchasers of milk – generally processors.

The code is a mandatory prescribed industry code made under the Competition and Consumer Act 2010 that will require farmers and processors to act in good faith in their business relationships.

It will also establish a mediation and arbitration process to address disputes and will empower the Australian Competition and Consumer Commission to monitor the conduct of farmers and processors to support compliance.

The requirements of the code will apply to all agreements between processors — as first purchasers of milk — and dairy farmers.

The code will also allow other matters to be negotiated and agreed between farmers and processors, as long as such matters comply with the code.