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Lessons learnt from the Senate Inquiry

Last week ADF were asked to speak at the Senate Inquiry in Shepparton, Victoria.

Before it was our turn, we listened to a number of dairy farmers from the region offer valuable insight into an industry that has seen its fair share of
hard knocks.

Centred around a few general themes, the dairy farmers talked about having greater transparency between processors and suppliers, contract fairness, and
a lack of faith with industry body leadership.

Firstly, we believe that the dairy industry needs improved contracting arrangements between farmers and processors; greater transparency through earlier
and clearer pricing signals for farmers; and less risk for farmers and more balance in risk along the supply chain.

In relation to greater transparency, ADF is in the final stages of completing the draft Code of Practice. We have worked in consultation with our state
member organisations, farmers and processors, and the ADIC to develop a Dairy Industry draft Code of Practice for contractual arrangements to help
ensure greater transparency and fairness in milk supply and pricing. This will also minimise the chances of what happened in April/May last year being
repeated.

ADF believes that it is important that contracts are fair, simple, realistic and easily understood by both parties ensuring there is more balance for farmers
along the supply chain. The Code of Practice will help ensure that supply agreements and contracts comply with the Unfair Contracts law that came into
effect on 12 November 2016.

This unfair contracts legislation extends existing protections against unfair contracting practices and is a practical step, that when coupled with the
dairy industry Code of Practice, will provide dairy farmers with fairer and more transparent contracts.

ADF will continue to work with farmers, processors and our industry bodies to build a system that builds resilience, rather than leaving farmers vulnerable.

Lastly, while it is important to acknowledge the things we do well as an industry it is also important to recognise the things that we could do better.
The farmers have spoken and we have listened.

While we are busy working on and achieving important outcomes for farmers, a lot of work goes on behind the scenes that we don’t often communicate to our
members well enough. We hear this and are endeavouring to do better.

It’s also important to note that the ACCC Inquiry into the Dairy Industry has started. If you are a dairy farmer and can attend one of the public forums
the ACCC needs to hear from the ‘horse’s mouth’. The key issues to be considered in the Inquiry include competition between milk processors, the effects
of private label products and pricing, contractual practices, availability of price, global markets and key factors influencing the profitability of
dairy farms.

 

The next public forums will be held on:

  • Tuesday 14 February 2017, Traralgon, VIC
  • Monday 27 February 2017, Warrnambool Golf Club, Warrnambool, VIC
  • Tuesday 28 February 2017, Shepparton Golf Club, Shepparton, VIC
  • Thursday 16 March 2017, Mercure Sanctuary Golf Resort, Bunbury, WA
  • Monday 20 March 2017, Hahndorf Football Club, SA
  • Wednesday 22 March 2017, Burnie Golf Club, Camdale, TAS

For more information and to register your interest please visit https://consultation.accc.gov.au/compliance-enforcement/accc-dairy-inquiry-farmer-consultation-forums/

John McQueen

Interim ADF Chief Executive Officer

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