The bid to get the new Dairy Code of Conduct in law by January 2020 has paid off with the code to take affect from January 1.
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It's the result of more than a year of decisions, debates and disagreements that has resulted an industry-changing outcome for dairy farmers across Australia.
The Federal Government made the launch announcement in mid-December 2019, heeding the advice of the ACCC to implement a Mandatory Code of Conduct as a matter of urgency after a NSW Parliamentary inquiry into industry.
According to the Department of Agriculture, the code will provide a fairer process for negotiating contractual arrangements between dairy farmers and dairy processors.
"The code will improve the balance in bargaining power between dairy farmers and processors, and will replace the previous voluntary industry code," the department states on its website.
The launch was welcomed by the NSW Farmers' Dairy committee chair Colin Thompson, indicating how it's crucial for enhancing dairy farmers' ability to negotiate with processors.
"This code will start the process of rebalancing the scales and will provide a level of transparency for all farmers," Mr Thompson said.
"The code prohibits many unfair contract elements that farmers have had to endure over many years."
One of the major factors of the code is the prohibition of retrospective step-downs in all circumstances. A "step-down" refers to a price decrease for suppliers, meaning the price paid is reduced for the milk supplied for the remaining months of the season, which runs in line with the financial year.
Although it's a step in the right direction, the code doesn't address the price farmers will be offered for their product, and NSW Farmers is continuing to call for action in the retailer sector.
"The irrational pricing of retailers has reduced the money available in the supply chain. It has placed pressure throughout the chain and this results in farmers' milk price being squeezed," Mr Thompson said.
"Consumers need to demand that retailers support farmers by selling dairy products for a fair price.
"We are calling for the price of dairy products to be lifted. We are pushing for a minimum price of $1.50 per litre for fresh milk and $9 per kilogram for cheese."
The Dairy Code of Conduct requires from January 1, 2020 that all new agreements between farmers and processors must comply with the code and agreements already in place have 12 months to transition to become code-compliant. Compliance with the code will be overseen by the Australian Competition and Consumer Commission.