Fonterra told its suppliers this week that it won’t follow Murray Goulburn and axe its version of the controversial clawback loan scheme for farmers.
Instead it has forecast a milk price of $5.30 to $5.70 per kilogram of milk solids for next season and says it will pay an extra 40 cents on top of that as a reward to farmers who continue to supply it, or pay a lump some to those who have retired.
Farmers who left Fonterra to supply another company will get nothing.
Voluntary code comes into effect in July
The voluntary dairy industry code of conduct has been negotiated between farmers and processors to prevent the actions that started the dairy crisis from happening again.
All parties have agreed to a code which will be in place by July 1.
However, president of the United Dairy farmers of Victoria, Adam Jenkins believes Fonterra might have breached the new code before it even begins.
“The code of conduct is exactly to remove this sort of activity happening,” Mr Jenkins said.
“If people have supplied milk for a season and whatever upward price is on that milk for a season, they should be entitled to get that.”
“This situation looks like it could be challenged by the voluntary code.”
The dairy lobby has a number of questions for Fonterra and wants it to recommit to the principals of the dairy code.
“I would also like to know how they arrived at their decision and did they consult their B.S.C. directors and their actual constituents, or they’ve just made the decision out of New Zealand or Australia and said there go suck it up.”
“It’s time that farmers stand up we’re sick of being disrespected we want the respect that we deserve and I think we need to put that in play,” Mr Jenkins said.
Interest in legal action
A Victorian law firm is continuing its push for a class action against Fonterra for its clawback loans.
David Burstyner, from Adley Burstyner, working with Harwood Andrews said there had been more interest from Fonterra suppliers to pursue legal action this week, than during the entire dairy crisis.
“I read the supplier letter from Fonterra yesterday and it has this sentence about doing the right thing,” Mr Burstyner said.
“I tell you what I’m scratching my head because if it is the right thing to do because farmers were underpaid, then all of them have to be repaid.”
“It just seems to me like a shameless attempt to once again trick farmers to continue supplying and that’s a different thing to making up for short changing them last year.”
Mr Burstyner said he is currently proceeding with the case and will formally start the court process in July.