Reaction mixed on dairy code.

It's fair to say that the Government's exposure draft of a mandatory dairy code of conduct has received a mixed reception.

The new code has been hotly anticipated since it was first announced by the government last year, and with all the noise around beefing up the provisions, expectations of the exposure draft were sky high.

At first glance, many provisions in the exposure draft align with the suggestions put to the Government by ADF, including that processors should be required to uniformly publish standard form contracts by June 1 each year. This is a definite win for farmers.

But several other clauses are less convincing and ADF is seeking legal advice.

Under the exposure draft, processors that are classified as small businesses are exempted from acting in good faith, a central pillar of the mandatory code.

The industry must also closely investigate a provision allowing a two-week cooling period during which either party can choose to terminate a milk supply agreement, despite processors having a full 30 days to to supply written confirmation of that contract.

By that logic, a farmer who strikes a verbal agreement but finds they are dissatisfied when they receive the written contract 30 days later cannot rely on the cooling period to escape the agreement without penalty.

Similarly, it is surely unreasonable to expect that farmers and processors have the same capacity to pay the same $63,000 penalty for breaching the code. An average size processor can make hundreds of millions of dollars in revenue, compared with the $136,000 generated by the average dairy farm over the same period.

The draft code, as it stands, has created a storm of controversy. I can attest to the complex and emotionally charged nature of this issue. ADF has been on the receiving end of a lot of criticism around codes over the last couple of years, despite taking the lead, through the ADIC, on developing the original industry code back in 2017.

ADF has been on the receiving end of a lot of criticism around codes... despite taking the lead, through the ADIC, on developing the original industry code back in 2017.

Much of this nuance is missing from the highly politicised environment in which the code is being viewed.

The spotlight is on dairy, with a senate inquiry now geared at investigating the profitability of dairy farmers during the twenty years since the industry was deregulated. The code will now be examined through this prism.

Politics is politics but at the end of the day, we need a code of conduct that levels the playing field for farmers.

A lot is resting on the code, but we must be clear - it will not solve pricing issues along the dairy supply chain.

The mandatory code has been established principally to ensure transparency in contracts between processors and farmers.

We hope that this will lead to more open and honest relationships between suppliers and their processor, but we must manage expectations in terms of what the code will achieve.

ADF will be actively engaging in the consultation period so we can ensure farmers get a code that looks after their interests.

Ultimately, we want a code that outlaws retrospective price step downs, ensures processors announce their opening prices before the start of the season (preferably on the same day), allows farmers to switch processors if they choose to make that decision, and above all else, establishes a fair and equitable appeals process for contractual disputes.

In the past, farmers have felt they didn't have a voice. That needs to change. We want farmers to feel empowered to appeal if they believe their contract terms are unfair. We are urging all industry players to stay engaged in the process so that we can have a robust mandatory code of practice.

Source: FarmOnline David Inall is the CEO of Australian Dairy Farmers

UDV slams failure to help farmers.

Paul Mumford.jpg

United Dairyfarmers of Victoria president Paul Mumford has slammed processors, retailers, government and industry organisations for not doing enough to help dairy farmers.

In a hard-hitting address to the organisation's annual general meeting in Melbourne on Friday, Mr Mumford challenged all sectors to do more to alleviate the pressure on farmers.

He later told the Australian Dairyfarmer farmers were exhausted to a point where they were unable to continue in the future.

"We've got to change that," he said.

He pointed in particular at processors and retailers for not sharing enough of their profits with farmers.

"Essentially they are protecting their own nest," he said.

"They are part of the food chain from paddock to plate and they haven't realised the value of the supply chain.

"They are looking after their own little piece of their own little investment; we've got to start looking at the whole system."

He questioned why milk processors, who were giving signals of strong pricing for next season as they chased milk in the face of falling on-farm production, had not lifted current season prices.

"The roles that processors play here in Victoria must be addressed," he said.

"A good industry is one built on trust, transparency and a ‘fair go’ for all.

"Since 2016 our relationship has been fractured and the wounds have not healed.

"We are looking for a show of goodwill; recognition from you of the importance of having a strong relationship with your farmers.

"Will you step up and make a genuine commitment to work hand-in-hand with us to take our industry forward?"

Mr Mumford also slammed retailers and said the recent rise in $1 a litre milk was not enough to help farmers.

"We've got to look at whole dairy cabinet," he said.

"It is just not the 10 cents a litre (rise).

"That is misinforming the consumer ... allowing them to think that 10 cents is the saviour to the dairy industry.

"That is not right; we have to look at the $6 cheese, the cream, the butter."

Mr Mumford said irrigators in northern Victoria, who had shown extreme efficiencies, appeared to be continually asked to deliver more to the Murray Darling Basin Plan when other states did not show the same technological improvements or commitment to efficiency.

"I am disappointed to say that our farmers and their communities in the north have been let down by industry, processors and governments," he said.

Mr Mumford asked governments if they would commit to engaging directly with farmers.

"Where are you?," he said.

"Will you commit to ... getting out to the farms in the regions to see first-hand what impact these conditions are having on family farm businesses and their communities and work with us to deliver solutions?"

He also criticised Dairy Australia for not taking greater action to prepare farmers for this situation.

"What happened to our industry preparedness?" he asked.

"Why were our levy investments not better targeted to deliver the preparedness required?"

Mr Mumford also questioned Australian Dairy Farmers' approach to long-term advocacy challenges, such as those posed by animal activists.

"Are you a best practice advocacy organisation well placed to deliver for members?" he asked.

Mr Mumford said the new Dairyplan must provide more than a website and a nice brochure.

The plan must deliver on its promise.

It was vital every dairy farmer across the state was engaged in the Dairyplan.

"I highly recommend everyone have their say in the Dairyplan," he said.

"If the Dairyplan says the UDV has to have its head chopped off and a new structure formed, then that's what has to happen.

"We've got to look at what the benefit for the dairy industry is and not just my role or ADF role or Dairy Australia role.

"We've got to look at the big picture and then enact it."

Retailers must do the right thing by dairy farmers.

For nearly a decade, dairy farmers have been wearing the pain caused by discounted products, whether it’s $1 per litre milk or cheap cheese.

I remember when the first $1 per litre products went on supermarket shelves on Australia Day, 2011 and the outrage caused by the resultant “milk wars”.

Prior to this marketing campaign, the last time milk was $1 per litre was around 1992. But in 2018, it’s impossible to live on a wage set at 1992 levels.

Now there is momentum to turn things around and give value back to the dairy supply chain.

Some supermarket chains have announced plans to help drought-affected dairy farmers.

Woolworths plans to introduce a special range of milk priced at $1.10 per litre in mid-October. Homebrand 2L and 3L milk products are currently on shelves for $1.10 per litre until the drought-relief milk product launches.

Coles is now selling its 3L Own Brand milk products for $3.30, with the money collected to be distributed back to farmers via a fund with an application process.

Both have been upfront about the fact that their initiatives are only short-term measures that aren’t intended to solve the problem of discounted dairy products.

As President of Australian Dairy Farmers, I represent farmers all across the country. Many are calling me asking how they are eligible to receive a fair price from either of these plans.

The problem with both plans is that many regions of Australia affected by drought with high production costs impacting thousands of dairy farmers, yet most of those farmers won’t be able to claim a benefit from either initiative.

Coles has encouraged any dairy farmers to apply for a grant through their fund, but those in drought-declared areas will be given priority, while

Woolworths intends to distribute the extra 10c from their drought-relief milk back to farmers via their processor.

While I support measures that see farmers paid a reasonable price for their hard work and dedication, I must ask, “Is this really the best we can do?”

Certainly ADF and our state dairy farmer organisations believe all dairy farmers must see a benefit from any increase in retail milk prices.

Farmers put tireless effort and resources into producing a quality product. And it leaves a deep and lasting impact to see your hard work sitting on a supermarket shelf for less than the price of water.

This pricing practice is not viable and we urgently need a shared solution to assist in building the long-term sustainability of Australian dairy farmers.

Ultimately, we must push for a permanent end to discounted dairy products, whether it’s $1 per litre milk or cheap cheese.

There is a groundswell of support for farmers hit hard by the drought and supermarkets have the best opportunity to scrap their discounted dairy products right across the breadth and depth of the dairy cabinet.

The supermarkets know what farmers want. They know what they deserve. It’s now time for them to take a big step forward and do the right thing by ending this pricing practice.

But until that time comes, I encourage the public to help dairy farmers by continuing to buy branded dairy products.

Source: - Terry Richardson, ADF President

ADF appoints Craig Hough as Director, Policy & Strategy

Craig has extensive experience in agricultural policy, strategy and delivery, principally during his employment with the Victorian Government. Craig Hough has an extensive track record providing high level policy advice to governments and boards and leading state significant strategies and projects in public and not for profit sector agencies covering the fields of agriculture, mining, disability, local government, community services, consumer affairs and criminal justice.

Over the past ten years Craig occupied various policy and program manager roles in the Victorian Government. For most of this period his work has been focused on driving growth and investment in Victorian agriculture. Under the previous Baillieu/Napthine Coalition Government Craig developed export plans and trade mission programs and led implementation of the $35.8m Food to Asia Action Plan. He also played a leadership role in delivering the government’s public sector reform agenda, which included a review of performance management, international engagement and industry assistance, and implementation of the Sustainable Government Initiative. Under the current Andrews Labor Government, Craig led submissions to the Productivity Commission’s Review of Agriculture Regulation and Australian Government’s Review of Industry Levies and development of its Agriculture Competitiveness Green/White Paper. More recently Craig led development of the Agriculture Victoria Strategy and the detail behind the Minister for Agriculture's $27 million digital agriculture program announcement. In addition to these flagship achievements Craig managed a number of core government policy processes such as Victoria’s representation at the Agriculture Ministers Forum, the highest decision making forum for Australian agriculture.

In August 2017 Craig graduated with a Master of Business Administration from Victoria University. This included receiving a Golden Key International Society Membership; an invitation only membership for students in the top 15% of academic achievement in all fields of study at the university.

Craig also has a Master of Social Science (Policy and Management) and Bachelor of Arts (Criminal Justice Administration) from RMIT University.