Dairy code of conduct could be tossed out before it’s been tested

The code of conduct long-sought by dairy farmers could be tossed out on a technicality, unless the Government steps in.

THE long-sought dairy code of conduct could be scrapped before it has even truly been tested.

A Senate committee is warning it could recommend the mandatory code – which came into effect on January 1 this year – be thrown out on a technicality, unless the Federal Government changes it.

At issue are provisions requiring processors and farmers to deal with each other “in good faith” – a term the Senate Standing committee for Scrutiny of Delegated Legislation argues is not clearly defined in the code.

Given a failure to comply can result in hefty fines up to $63,000 for processors and $21,000 for farmers, the committee wants the code amended so penalties only apply to “terms defined in written law”.

If not resolved by late August, the committee has indicated it would file a disallowance motion, which means the code could be cancelled.

Committee chair Liberal senator Concetta Fierravanti-Wells said the committee was not concerned with the “policy merits or otherwise” of the dairy code, only the technical aspects.

“The committee has a longstanding scrutiny view that civil penalty provisions should be sufficiently clear on their face so that people and entities can understand their legal obligations,” Senator Fierravanti-Wells said.

Agriculture Minister David Littleproud, in letters to the committee, has argued the code cannot be amended in a way that gives a clear definition while also maintaining the code’s “objectives and purpose”.

Mr Littleproud said factors that could constitute good faith were included to guide industry, without restricting how the term was interpreted.

The committee will meet department officials when parliament resumes next week.

“The Government is still engaging constructively with the committee on this matter … as such, it is too early to predict whether the committee will ultimately consider it necessary to recommend disallowing the code,” Senator Fierravanti-Wells said.

The dairy code was introduced this year after several years of lobbying and consultation. Farmers feared the code, brought in by former ag minister Bridget McKenzie, had been watered down to appease processors. 

Labor senator Raff Ciccone, who sits on the committee, said the current situation added further uncertainty for producers.

“Seven years since the Coalition won government, dairy farmers still haven’t seen any meaningful action to support industry,” he said.