Senate Dairy Report is spot on says Dairy Connect

Advocacy group Dairy Connect has thrown its weight behind the findings of the Senate Standing Committees on Economics inquiry into the Dairy Industry presented in Parliament tonight.

A total of 12 recommendations arising from the far-reaching review were tabled as part of the Senate package.

CEO Shaughn Morgan said today the Senate recommendations were largely in line with a written Dairy Connect submission provided last November and face-to-face evidence given to the to the review by Graham Forbes, President, Dairy Connect Farmers Group in Brisbane earlier this year.

The Senate inquiry into the Australian dairy industry began following dramatic cuts to farm gate milk prices by processors Murray Goulburn Co-Op and Fonterra.

The subsequent clawback of money previously paid to farmers gave rise to a strident debate about contractual fairness in the industry.

The Senate review has been running parallel to a second inquiry being undertaken by the Australian Competition and Consumer Commission which is due to hand its report to the Federal Treasurer in November.

Recommendations from the Senate review today included asking the ACCC to reflect on how effectively the recently released Australian Dairy Industry Council’s voluntary Dairy Industry Code of Practice would address power imbalances between milk producers and milk processors.

“The Senate Committee also asked that the ACCC consider how collective bargaining by dairy farmers could be strengthened,” Shaughn Morgan said.

“The Senate report has also recommended that any review of the voluntary Code for contractual relationships be conducted independently.”

“Further the report puts forward that industry organisations should team up with retailers to develop an ‘education campaign’ to promote awareness of the industry value chain so consumers were empowered to make more informed purchase decisions.”

Shaughn Morgan said careful consideration should also be given to the Senate recommendation that dairy processors set opening milk prices ‘conservatively’.

“This may help avoid the damaging price step-downs by Murray Goulburn and Fonterra that impacted dramatically on family farmers and entire regional & rural communities during the past 15 months,” he said.

“Importantly, it was recommended that the ACCC address the challenge of unfair contract terms and advise whether short form milk supply contracts fell within the scope of the law relating to unfair contract terms.

“We support the recommendation that the government prioritise action to slash red tape for cooperatives and establish programs to facilitate the establishment of new cooperatives.

Dairy Connect remains supportive of the important and vital role that Dairy Australia provides to the dairy sector in RD&E.

Senators Jacqui Lamble and Nick Xenophon co-sponsored the motion to form the Senate Economics References Committee inquiry, with the support of the Government and Opposition, in October last year in response to the cuts made by Murray Goulburn and Fonterra to farm gate milk prices in April.



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