Victoria’s peak body for dairy farmers said it would ‘‘create balance and transparency along the industry supply chain’’ and deliver farmers increased power during negotiations.
The code, which came into effect on Saturday, includes provisions to ensure price variations and payments are more open and fair.
United Dairyfarmers of Victoria president Adam Jenkins said it was important contracts were ‘‘fair, simple, realistic and easily understood by both farmers and their processor’’.
‘‘For too long there has been a ‘take it or leave it’ mentality when it comes to negotiating supply agreements and the code aims to fix this attitude as part of our plan to rebuild trust and confidence within the dairy industry.’’
The stipulations for processors and farmers in the code — a collaboration between the UDV, Australian Dairy Farmers and other groups — include a clear price or schedule of prices, a 30-day written notice of milk price step-downs and 90 days’ notice if a processor does not offer farmers on fixed-term contracts another fixed term.
‘‘It’s an achievement of the dairy industry that in tough times we’ve been able to work together to come up with real solutions to improve industry practice,’’ Mr Jenkins said. ‘‘No-one wants to see the milk crisis repeat itself, so it’s important we obtain clarity and simple clear pricing mechanisms in our future supply agreements and contracts.’’
Last year processors cut milk prices, prompting financial hardship for the region’s dairy sector.
Source: SHEPPARTON NEWS