Milk processors, dairy farmers nearing code of conduct deal on price contracts; Lion the holdout
Updated
Dairy farmers and milk processors are close to sealing a deal for a new voluntary code of conduct on milk price contracts, with all but fresh milk giant Lion having indicated they are prepared to sign.
The code of conduct would provide farmers with greater pricing transparency, clearer contracts and forewarning of price cuts.
Instead of sudden and retrospective milk price cuts like the ones delivered to Murray Goulburn and Fonterra suppliers in Autumn last year, processors would have to give notice to farmers when a cut was coming and when it was going to be implemented.
The interim CEO of Australian Dairy Farmers, John McQueen, said it would be a voluntary code and believes the industry can regulate itself.
"I think the industry can police itself because it's been through such a challenge over the last 12 months with the loss of confidence from farmers in their processors," he said.
"This is a way to start to rebuild some of that confidence. It's one element of that rebuilding process of the relationship between farmers and processors."
The industry is also pushing for the removal of exclusivity clauses where a processor will not buy every litre produced by a contracted farm.
Nearly all of the major milk processors are involved in the discussions and it is likely the code will be announced in the coming months.
Dairy processor Lion is the only major company to not take part in the talks.
"You have to ask them (why they're not taking part)," Mr McQueen said.
Topics: dairy-production, agricultural-policy, agricultural-subsidies, agribusiness, food-processing, shepparton-3630, canberra-2600, melbourne-3000
First posted
