SOUTH East dairy farmer Graeme Hamilton has welcomed last week’s release of the Dairy Code of Conduct, with the code set to take effect on January 1.
Mr Hamilton, along with wife Michele and son Craig, hosted Federal Agriculture Minister Bridget McKenzie and Member for Barker Tony Pasin at Hamilton’s Run to discuss the code.
“The mandatory Dairy Code of Conduct was a key recommendation from the 2018 Australian Competition and Consumer Commission (ACCC) Dairy Inquiry which found contracting and industry practices were weighted heavily in favour of processors,” Ms McKenzie said.
“The final code is different from the draft that was consulted on and is now a stronger, clearer document that delivers the protections it should for dairy farmers.
“In line with feedback received from dairy farmers, the code prohibits retrospective pricing step downs and prevents unilateral changes except in a narrowly defined set of emergency circumstances.
“It stops processors withholding loyalty payments from farmers who are changing processors and it prohibits exclusive supply arrangements where other conditions would be to the detriment of dairy farmers.
“It also establishes a dispute resolution process, increases the powers of the ACCC in the space and introduces civil penalties.”
Ms McKenzie said the code was just the first piece in the puzzle, with the next step to focus on the relationships between retailers and processors.
Speaking passionately about the code, Mr Hamilton said it gives all points along the supply chain a framework.
“It gives us a clear understanding what our responsibilities are and also what the processors responsibilities are,” he said.
“Those things have become a big grey over time, so setting them out in documents and having clear understandings is very important if we want to be a professional industry.
“We want to be business people conducting the most efficient industry we can.”
Mr Hamilton also praised the advocacy of the South Australian Dairyfarmers Association (SADA) during the development of the code.
“I think we have really good farmer representation in South Australia and I was pleased with how the process went,” he said.
“I did not personally give feedback about the code, but I spoke with our SADA president, John Hunt and discussed it in depth.
“This code by itself will not suit all industry issues, but it is another link in the chain to make things work more professionally.”
Mr Pasin said dairy farmers everywhere were doing it tough due to increased input costs that were not being reflected in the price for milk at the farm gate.
“Dairy farmers across the country are under real and sustained pressure,” he said.
“In some cases it is the drought, or water allocations and it is combined with higher input costs for electricity, fodder and water.
“At the same time there has been a power imbalance in negotiating a fair farm gate price from processors.”
The code comes as Dairy Australia’s Australian Dairy Plan draft was released in recent weeks.
Mr Hamilton said everything was a plan and would not instantly change the industry.
“These changes and ideas allow for movement within the industry,” he said.
“The plan does not say this is what will happen and this is how to do it, but it gives us all a framework to work within and work together.”
