DAIRY processors threatened to withdraw their annual $1 million contribution to the Australian Dairy Farmers if the peak farmer lobby group supported a mandatory code of conduct.
A leading industry source has told The Weekly Times two processors warned ADF that if it supported a mandatory code, “your funding stops”.
The revelation has come after The Weekly Times last week highlighted the peak dairy and livestock lobby groups were refusing to adopt reforms that would bring greater transparency for farmers.
This drew accusations of funding conflict of interests, with ADF receiving $1 million annually from the processor body Australian Dairy Products Federation. That funding agreement is up for renewal next year.
ADPF executive director Peter Stahle repeatedly stated “no” to a series of questions on processor demands on the drafting of ADF’s submission and threats to withdraw funding. But both groups admitted they shared each other’s submissions before they were lodged with the Australian Competition and Consumer Commission.
Mr Stahle said he had viewed ADF’s submission before it was lodged with the ACCC, while ADF chief executive David Inall said “it was necessary for ADPF and ADF to share our respective positions” prior to lodgement.
Just how much influence processors had over the ADF’s submission is a contentious issue, given nearly every one of its state dairy farmer member organisations, including NSW, Queensland, South Australia, Tasmania and Western Australia, supported a mandatory code.
The only exception was the United Dairyfarmers of Victoria, which supported the processors’ position of sticking with a voluntary code.
When The Weekly Times asked South Australian Dairyfarmers’ Association president John Hunt if dairy processors had demanded the ADF draft its submission to oppose a mandatory code, he said: “I’ll leave that one alone, you have to be careful.”
There are a number of similarities between ADF’s and ADPF’s submissions, most notably the concluding paragraphs. The Australian Dairy Farmers conclusion stated it “strongly recommends that Government not proceed with a determination on a (mandatory) code of practice for the dairy industry without full and frank engagement with ADF, as well as Australian Dairy Industry Council and its members”.
The ADPF conclusion stated it “would strongly advocate that no further commitment be made to support a mandatory code without first engaging formally with the ADIC and providing support to the industry to deliver its voluntary code”.
State dairy farmer groups claim processors are already breaching the voluntary code and say a mandatory code, policed by the ACCC, would strengthen their bargaining power and competition.
But ADF president Terry Richardson has told farmers to stick with the voluntary code, saying a mandatory code would take up to five years to develop.
However an examination of mandatory codes, developed by the Federal Government and policed by the ACCC, shows that most take between 12 and 18 months to develop.
The ACCC already oversees mandatory codes on unit pricing, franchising, oil, wheat ports, sugar and horticulture.
An ACCC spokeswoman said once the Federal Government initiated a code, it underwent a process of consultation, a regulatory impact statement was drafted and the final code was tabled with Parliament for 15 sitting days.
Federal Agriculture Minister David Littleproud has flagged his support for a mandatory dairy code of conduct, while Labor agriculture spokesman Joel Fitzgibbon has already committed to introducing a mandatory dairy code if Labor is elected.
By: PETER HUNT
Source: The Weekly Times