Scenic Rim farmers should benefit from ACCC scrutiny of dairy code of conduct

FAIR GO: Processors may face harsh penalties for breaching the dairy code of conduct.
FAIR GO: Processors may face harsh penalties for breaching the dairy code of conduct.

The Australian Competition and Consumer Commission says it is closely monitoring the introduction of the new mandatory dairy code of conduct, including by checking processors' compliance with the code, and is ready to take enforcement action where appropriate.

This comes after a senate inquiry instigated by Scenic Rim based senator Pauline Hanson saw dairy farmers state their case in Canberra last week.

Ms Hanson said she was furious at the treatment of dairy farmers and the failure of government to provide them with a minimum farmgate price.

"It's up to the ACCC to determine a fair price based on the region and cost of production," she said.

"If it costs 55 cents to produce a litre of milk, that farmer should get 70 cents."

Ms Hanson said she hoped the ACCC would pull processors into line.

"The code of conduct is weak," she said. "I think it favours the processors more than the farmers.

"Queensland dairy farmers are on their knees. Victoria is the only state to not lose herds and here where we used to have 1500 farms we now have only 300."

The dairy code required processors to only buy milk from farmers using compliant milk supply agreements, and to have published those agreements online before 2pm on June 1. Agreements must include a minimum milk price, among other conditions.

The ACCC said it had accessed more than 100 published milk supply agreements since 1 June and it appeared most processors published at least one milk supply agreement by the deadline. However, the ACCC said it was undertaking a detailed review of compliance, which included assessing whether the terms of milk supply agreements complied with the code.

"The new code is designed to address a significant imbalance in bargaining power between processors and farmers," ACCC deputy chair Mick Keogh said.

"Milk supply agreements offered by dairy processors must meet certain minimum standards, like including cooling off periods for farmers while not containing contract terms that were previously used to push risk onto farmers."

"Dairy farmers now have more information than ever to help them make a choice of processor well ahead of the start of the new season."

"The ACCC is aware of concerns that certain processors allegedly failed to publish milk supply agreements by the specified deadline, and concerns about the content of some agreements, and is investigating these matters."

"We are actively engaging with farmers and processors and closely watching adherence to the code so it can deliver the intended benefits to farmers and the whole industry. We note that some processors have voluntarily changed their approach after being contacted by the ACCC regarding code compliance issues."

The ACCC said it also had the power to require corporations which are subject to the code to provide information and documents which the code requires them to keep or generate, and to carry out compliance checks.

"As the dairy code is legally binding, breaches may result in enforcement action by the ACCC, including going to court to seek pecuniary penalties," Mr Keogh said.

"This is why it is so important that processors and farmers are aware of the code's requirements and comply with them. The ACCC will take very seriously instances where parties fail to do so."