Latest draft of the Mandatory Code of Conduct still leaves dairy farmers high and dry.

Individual farmers and key industry organisations within the dairy industry were called upon this week to provide feedback on the Exposure Draft of the Mandatory Code of Conduct for the Dairy Industry.

Putting it bluntly, the initial intent of the Code has been significantly watered down in the interests of processors over farmers in this draft. The intent to address the imbalance of power between farmers and processors will not be achieved with this watered-down code.

While many core issues have been addressed, there are still 3 primary areas that specifically concern farmers in the Queensland dairy industry not covered or remedied by the Code.

These include:

  1. the disparity between the contract period (usually 3-5yrs) and fixed pricing period (usually 12 months only);

  2. exclusivity clauses are still allowed/are a part of contracts between processors and farmers;

  3. that the Code cover the conduct of Retailers in the dairy industry value chain.

QDO and several other industry bodies have consistently requested these areas be addressed in a manner that is fair and reasonable and provides adequate protection to the dairy farmers but has been consistently met with dismissal from those responsible for the drafting of the Code. A point in case is that there is almost no chance that the third point listed above, will be considered for inclusion in the Code.

Given the significant problems with the code, it would seem very ambitious to try and rush it and implement it on 1 January 2020. We need to also ensure that contracts signed before the commencement date are also compliant.

QDO has been open and transparent regarding the Code – both its benefits to the industry and the flaws with its current drafting. We will continue to advocate for its acceptance by our members once the areas of concern outlined above have been properly addressed.

We strongly urge that while the Code remains in draft format, farmers should consider what is fair and reasonable in their contract term for their own circumstances before signing and be prepared to ask for changes

QDO President – Brian Tessmann

In the news: Dairy farmers call for fair milk prices.

Millaa Millaa dairy farmer James Geraghty with grandson Charlie Daley are calling for fair milk prices.

Millaa Millaa dairy farmer James Geraghty with grandson Charlie Daley are calling for fair milk prices.

Dairy farmers in Far North Queensland have joined the chorus of those demanding a fair price be paid for their milk.

Millaa Millaa farmer James Geraghty purchased his farm with his parents in 1981 and has a dairy herd of about 230 Fresians.

But like so many in the industry, Mr Geraghty is struggling to maintain a viable business amid soaring production costs and low prices.

Mr Geraghty said while farmers benefited when generic supermarket brand milk increased in price by 10c a litre, further increases had not been passed on and a levy on branded milk had not been established.

"The initial concept put up quite some time ago was for 10c a litre to be put on all milk," Mr Geraghty said.

"We were getting the entire 10c on the generic milk and the lobby lasted three or four months, which was appreciated by the farmers.

"But they've bumped it up and the second 10c isn't being passed on at all, branded milk is not included, so we're only receiving about 3.5c a litre on total production."

Mr Geraghty said it had been a tough season on the Tablelands, with weather conditions contributing to the difficulties.
"From mid December to the end of June it didn't stop raining and now it's hardly raining at all.

"Everything we use had to be freighted in, we have very little feed and cotton seed is twice what we paid last year. It's pretty tough everywhere at the moment, and production is well down."

Hill MP Shane Knuth this month put a motion before state parliament calling for the full 10 cents a litre to be passed on to the dairy farmers, saying it was vital for the industry's survival.

The Katter's Australian Party member has long been an advocate for the dairy industry, having unsuccessfully introduced a Fair Milk Logo Scheme into Queensland parliament, which would enable processors to put a logo on bottles to indicate they had paid farmers a fair price for milk.

Mr Knuth said there were now only 53 dairy farmers remaining on the Atherton Tablelands down from 270 prior to deregulation. Throughout Queensland only 340 dairy farmers remain, down from over 1500 in 2000.
"The Queensland dairy industry is in dire straits," Mr Knuth said.
"If the current trend continues, this once proud and booming industry will cease to exist in the year 2028.

"We've had many complaints from dairy farmers in deep trouble, they're now to the point where they are borrowing money to pay their bills."

Mr Knuth said while milk prices had increased for consumers, the promised full 10c a litre was not being passed on.

"There has been a lot of back slapping with the major retailers and federal agricultural minister sending a misleading message that the 10 cents a litre milk increase is going directly to the farmer. This is only on the supermarket branded milk and not all the other brands," Mr Knuth said.

"However, the reality is out of the 10 cent increase, dairy farmers in North Queensland are only receiving two cents. To top it off - further adding insult to injury - the supermarket giants again increased their milk with another 10 cents, and still nothing is going back to the dairy farmer.

"To put it in perspective there has been 20 cents a litre milk increase in the supermarkets -and yet only two cents is going back to North Queensland dairy farmers."

Mr Knuth said a full 10 cents a litre to the farmers was the original intent after the Queensland Dairy Organisation launched a petition signed by 140,000 constituents supporting 10 cents increase to help save the dairy industry.

Source: Queensland Country Life - Jessica Johnston 23 Sep 2019

Farm trespassers face jail under new NSW laws.

THE NSW Government has announced the nation’s first jail terms for farm trespassers and will introduce tough new measures to protect ‘the right to farm’ from nuisance complainants.

NSW Nationals’ leader and Deputy Premier John Barilaro today announced the State’s new Right to Farm Bill would, if passed, legislate jail terms up to three years for farm trespassers and fines up to $22,000.
New offences would be created for aggravating factors such as trespassing as a group, damaging property and releasing livestock and tampering with farm gates and ramps.

In a first for the farm sector, the NSW Government will also attempt to bring in legal recognition of a farmer’s right to farm, to protect farmers from “nuisance complaints”, claims and legal action from their neighbours and other third parties.

It means a court won’t be able to order an injunction against an activity that is allegedly causing a nuisance such as trucks moving chickens or spray rigs spraying crops.

The tough new laws have been hailed by the NSW Farmers’ Association, which has run a major campaign on the impact of farm trespass on businesses and rural families.

NSW Nationals’ leader and Deputy Premier John Barilaro said the Bill would help address the increasing number of attacks on farming families.

“This legislation is all about sending the clearest possible message: enough is enough,” Mr Barilaro said.
“If you invade a farm in NSW you’ll face the toughest penalties in the nation and three years potential jail time.

“If you move next door to a farm and decide you don’t like the way it looks or sounds, then you won’t have the grounds to take that farmer to court with nuisance claims.”

Agriculture Minister Adam Marshall said the changes include new offences that do not exist in any other state or territory.

“Existing penalties of up to $5500 in fines are just a slap on the wrist,” Mr Marshall said. “Now if you’re farming legally and have so for many years, you’re not going to cop a nuisance claim and potential legal action just because some folks from the city moved next door and decided they didn’t like the sound of your dairy cows.”

The Bill comes on top of recent regulatory changes introduced under the NSW Biosecurity Act 2015, which impose further offences and large financial penalties for farm trespass which breach on-farm biosecurity plans.

Source: LUCY KNIGHT , The Weekly Times

The local farmers behind the labels.

Left to right: Torie Harrison, Kacey Walker, Tony Green, Lucas Kennedy and Kym Harrison.

Left to right: Torie Harrison, Kacey Walker, Tony Green, Lucas Kennedy and Kym Harrison.

Since deregulation in July, 2000, almost four in five of Queensland's dairy farms have exited the industry - the number has gone from 1,580 to just 324.

Five years ago Conondale dairy farmer Lucas Kennedy approached Woolworths to bring their Farmer's Own brand to Queensland and signed a direct deal with the supermarket.

"I actually approached them because they started in New South Wales, they were going there a good year before they came up here so I just kept ringing before they eventually came out, because I could see the whole concept of what they were doing," Mr Kennedy said.

"It was a very good relationship right from the start, they came to me and said 'What is a sustainable' milk price?' and I told them and they honoured that. "They've come in and said what do you need to still be here in ten years time and I guess I just felt that was the best way to go because where we were going we weren't going to survive and I wouldn't be here today."

The five Sunshine Coast farms are the only ones in Queensland to have a direct relationship with the supermarket.
Tony Green from Maleny is a fifth generation dairy farmer whose property has been in the family since 1906 when it was selected.

"It's good to keep it going and keep it in the family and hopefully we can do well out of dairying with this contract and keep going in the future."

Torie Harrison juggles working on her farm with working for the Queensland Dairy Farmer's Organisation.
"I'm so pleased that mum did get the contract to supply Farmer's Own because we were thinking about closing the dairy down so it has meant the difference for me staying and working in the dairy industry to possibly not working in the dairy industry at all."

Kacey Walker from Cambroon, juggles dairy farming with running a free range egg farm.
"We felt very fortunate to come on board with this group. They were selecting individual farmers, we were off contract at the time and were able to come on board."

Source: Jen Nichols - ABC Sunshine Coast

What’s next? Insight into QDO’s next steps to increase the farmgate price.

In March this year, QDO achieved a significant success with removing $1 litre milk from supermarket shelves.

This was not our end game; it was our start.

The campaign was intended to remove the artificial floor price created by marketing $1 milk. The incremental price increase that farmers have received as a result of this campaign is by no means enough.

Over the last few months we have had a few members ask what QDO is planning to push for a higher, sustainable farmgate price.

Our first campaign capitalised on consumer awareness and support for farmers facing drought conditions to spearhead the push to increase the farmgate price. While over 65% of Queensland is still drought declared consumers, those who live in our major population centres are receiving steady rain and don’t see that the drought continues and continues to put the future of our industry in jeopardy.

Is it fair? No. Is it logical? No. Unfortunately for us all, it is simply the fact that we are faced with.

While they may seem far removed from the negotiating table that we are used to, the first campaign showed us that the 24 million odd Australians consuming our product daily, are powerful allies for our industry.

Educating consumers about the impact that their purchasing behaviour has, is vital to negotiating a higher farmgate price and this is our first step.

QDO is working with other state organisations to develop the strategy. A lot of planning, meetings, consultations etc are taking place in the background as we develop the next campaign to increase the value across the whole dairy cabinet.

We will be consulting with processors, supermarkets, relevant politicians and government bodies over the coming months so that the campaign has the best chance of lasting success.

Simply put, there is no quick fix. Drought and many other factors continue to put pressure on farm production costs, and these won’t end any time soon. But to ensure that we get farmers a sustainable price, we need to work smarter and we need to work together.

If you would like to help once the campaign kicks off, please get in touch with the QDO office.

QDO President – Brian Tessmann

 

Access to skilled overseas workers now easier for Australian dairy farmers.

Dairy farmers now have more opportunities to attract and retain staff, after skilled overseas workers employed under a Dairy Industry Labour Agreement were made eligible for permanent residency.

The changes were successfully progressed by the Australian Dairy Farmers, working closely with Dairy Australia, making the Australian dairy industry more attractive to skilled international labour.

The pathway gives dairy farmer Kristen Clark, from Finley, NSW, the opportunity to retain her skilled overseas worker who has developed a strong understanding of her farming system.

The fifth-generation dairy farmer milks 900 cows in the Riverina region alongside her mother, Helen and sister, Donna, producing more than eight million litres per year.

Kristen employs four family members on the farm, as well as five long-term local staff.

With farm workers increasingly hard to find in her local area, Kristen has employed a farm hand from Guatemala for the past five years under a temporary visa through a Dairy Industry Labour Agreement.

"We have always struggled to build our workforce and fill positions by getting locals on the farm," Ms Clark said.

"We fill the gap with overseas workers, but the issue is that is they're only able to be here for a limited time and they're generally unskilled.

"The person we've employed has a built her skill base working for us -- when she finishes up, we have to start from scratch with someone else."

For each new farm worker Kristen employs, she estimates the cost to her farm business to be about $2000 in recruitment and training.

As well as reducing the cost of hiring new farm workers, the permanent residency pathway gives Kristen the opportunity to give her staff more training, building their capacity to learn new skills as her mum takes a step back from hands-on tasks.

Kristen also sees permanent residency as an opportunity for her overseas workers to get more involved in the local community.

"We want to employ people who live in our community, so we can give back to our community, but there will always be gaps to fill," she said.

"People with permanent residency can fill that gap, because they get involved in the community as well."

Farm hand Janeth Ventura is excited by the opportunities a permanent residency pathway will bring for her family and her dairy career.

The 36-year-old has raised her two children, aged 3 and 6, in Australia and hopes a permanent residency pathway will allow her to continue living in rural Australia, creating more stability for her family and her role on-farm.

"My father had a small dairy farm in my home country, so I'm in my element with this job and I love working with Australian dairy cows," Ms Ventura said.

"I think working in Australia has improved my skills -- I've learned new abilities because the farming system is so different."

Through a permanent residency pathway, Ms Ventura hopes to upskill and pursue further training.

To vary existing labour agreements or apply for a new labour agreement to enable a pathway to permanent residency for their valued staff, farmers should email: labour.agreement.section@homeaffairs.gov.au.

More information on the Labour Agreement can be found at the People in Dairy website at thepeopleindairy.org.au/visa.

Source: FarmOnline.com.au

Dairy groups split on Coles move to buy directly from farmers.

The Coles move to buy milk directly from farmers has split dairy advocacy groups.

NSW Dairy Connect was glowing in its praise of the move, Australian Dairy Farmers cautiously welcomed it ,while the Queensland Dairyfarmers Organisation said it was difficult to trust the intentions of the supermarket giant.

As the new arrangements will apply only in Victoria and central and southern NSW, the QDO stance at this stage is largely academic as its members won't be affected but it reflects the Queensland organisation's moves to position itself as a leading national organisation.

Coles announced last week it would start sourcing milk directly from farmers in Victoria and southern and central NSW from July.

Saputo Australia would continue to pack the milk for the supermarket chain's discount lines, which have sold for $1.10 a litre since March.

Coles has put out the call to Victorian and NSW farmers interested in contracting their milk production to send in an expression of interest.

It said was also "looking for opportunities" to expand its direct buying footprint to other milk-producing regions.

Dairy Connect welcomed the announcement that Coles was side-stepping the processor in NSW and Victoria.

"While stakeholders had yet to have access to the fine print involved with the proposal, on face value, it provides a pathway to the future for the milk supply chain," Dairy Connect president Graham Forbes said .

"Notionally, the proposal should deliver price-certainty for up to three years for dairy producers supplying Coles house brand milk."

The plan would address a number of complaints the farmers had about the existing system.

But QDO said while Woolworths had a direct relationship with farmers through its Farmers' Own brand, this was a premium brand that sold at more than $1.50/L, while the Coles deal would apply to its private label milk, that sold for $1.10/L.

QDO said it expected dairy farmers who supplied Coles to receive the full 10c/L the supermarket had promised would be directly passed on to farmers when it lifted the retail price earlier this year.

It also expressed concern about the potential power imbalance between Coles and its suppliers.
The QDO said farmers, as small business owners, already struggled to negotiate with multinational processors for a fair farmgate price. 

It asked what hope would an individual farmer have to negotiate a fair and sustainable farmgate price when up against the might of Coles.

"At this stage, the nuts and bolts of how and what this relationship and process will look like is pure speculation, with only Coles knowing truly what its intentions are," QDO executive officer Eric Danzi said.

The supermarket should be lifting its price of fresh milk to pre-2010 levels.

"What we need to ensure is that this does not give Coles even more power over dairy farmers and does not allow Coles to revert to $1/L pricing," Mr Danzi said.Australian Dairy Farmers said more competition for milk was healthy and the Coles deal had the potential to provide greater transparency within the dairy supply chain between farmers and retailers.

But although saying it was hopeful, it wanted further information about how the deal would work.
It also called on Coles to commit to ensuring that $1/L milk never returned to its shelves.

The most unsustainable part of the dairy industry was the lack of value being returned to farmers through the domestic market.

ADF said it was imperative value was delivered through the supply chain, with farmers receiving their fair share for the hard work, risk and investment they had in this industry. 

This included farmers securing their fair share of future retail price increases across the dairy cabinet.

Source: Farm Online. This story first appeared on Australian Dairyfarmer

Can we trust them? QDO takes on watchdog role following Coles' announcement.

Coles’ announcement that they intend to bypass processors and start a direct relationship with dairy farmers came as surprise to most within the industry and many are trying to determine what position to take. Given Coles’ previous history with the dairy industry, it is difficult to trust the intentions of the supermarket giant.

While Woolworths has had a direct relationship with farmers through Farmers’ Own, this brand competes with other premium branded white milks at a price point above $3 for 2 litres. Coles, however, intends to sell its farm direct milk as its private label.

Coles has previously committed to ensuring all of the additional 10c/L added to its milk price is passed through to farmers. It would be expected that this latest announcement will see dairy farmers who supply Coles receive 10c/L, or around $1.30/kg of milk solids, above previous prices they received.

In their statement, Coles cites its existing ‘successful’ direct producer relationships to show that this proposed model can work to provide health profit margins for both retailers and the farmers.

The 2018 ACCC report into the dairy industry identified the imbalance of power within the value chain as the key to the failure of the dairy industry. The Mandatory Code of Conduct for the dairy industry, that is currently being drafted as a direct result of this report, seeks to address the imbalance of power between farmers and the processors.

As individual small business owners, farmers have struggled to negotiate with multinational processors for a fair farm gate price. One must question then, what hope an individual farmer will have to negotiate a fair and sustainable farmgate price when they go up against the might of Coles.

 The fact is that Coles is capitalising on consumer sympathy for the dairy industry. The massive support that consumers gave dairy farmers during last year’s Drought Relief campaign has prompted Coles to use this to boost sales of its discount product lines over branded milks. Consumers will undoubtedly believe that this new arrangement has been designed to benefit the farmer and therefore support it.

 “At this stage, the nuts and bolts of how and what this relationship and process will look like is pure speculation, with only Coles knowing truly what its intentions are” said QDO Executive Officer, Eric Danzi.

 “We need to work with the supermarket giant to increase the RRP price of fresh milk to pre-2010 pricing. In today’s market that would equate to around $1.50/L. which would allow farmers to receive a fair farmgate price.

 What we need to ensure is that this does not give Coles even more power over dairy farmers and does not allow Coles to revert to $1/L pricing”.

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