Dairy industry code of conduct meetings to start in Gympie
NEXT week representatives from the Australian Government Minister for Agriculture, David Littleproud's department will be in Gympie to begin local consultations
Gympie
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NEXT week representatives from the Australian Government Minister for Agriculture, David Littleproud's department will be in Gympie to begin local consultations on a mandatory code of conduct for the dairy industry.
The code aims to make contracts fairer, more transparent and enforce a dispute resolution process between dairy farmers and processors.
While I am in support of the mandatory code, I am concerned that it doesn't go far enough.
The true value of the dairy supply chain is influenced by a number of factors, including the cost of production, the cost of processing, and the cost of selling milk to consumers.
On Australia Day in 2011, Coles made a decision to slash the price of their private label milk to $1 dollar per litre, which was immediately followed by Woolworths.
This completely distorted the value of the supply chain.
The actions of the supermarket giants forced the processors to cut the price they paid farmers.
It also put the squeeze on branded milk to be competitive with supermarket private-label milk.
Cutting the retail price of milk and holding it at $1 per litre for seven years since has completely undermined the true value of the supply chain.
Queensland Dairyfarmers Organisation proposed a 10c per litre levy on all milk that would be collected by the supermarkets and paid in full to the farmer via the processor.
After some initial resistance Coles and Woolworths agreed, and I thought it was a welcome step in the right direction. But they gutted the proposal by applying the levy to only some of their private label milk.
When I hosted a dairy round table meeting in Gympie, everyone agreed our local dairy industry faces extinction unless farmers get a fair price for their milk.
The supermarket giants have had the time and opportunity to play fair.
I believe a Royal Commission is needed to examine the supply chain to benefit farmers and consumers alike. If dairy farmers agree they can join with me and let the Minister's department know at next week's dairy industry consultation.
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