Clawback lessons ensure a stronger footing for dairy future

The age of the dairy farmer co-operative is behind us, writes Terry Richardson, but a new era presents opportunities.

Building plan: The Murray Goulburn signage is a distant memory, and so too the idea of a dairy farmer co-operative. Picture: Peter Hemphill

This month marks five years since the onset of a crisis that would ultimately lead to the demise of Australia’s largest dairy co-operative, Murray Goulburn, impacting our farmers and industry in a way never before seen.

There is no question that the past five years have been challenging for our dairy industry, as we have sought to make sense of these events.

But we must look to the future and how we can work together to ensure the industry moves forward with confidence.

We are now operating in a changed landscape.

The age of farmer co-operatives as a key feature of the Australian dairy industry is behind us, and the relationship between farmers and processors has undoubtedly been altered.

The real test now is how we adapt to this new reality.

There have been several initiatives over the last few years to address these circumstances, from government inquiries to codes of conduct to an all-of-industry strategic plan.

The Australian Competition and Consumer Commission inquiry into the dairy industry found farmers suffered from a weak bargaining position and recommended establishing a mandatory code of conduct to provide clarity to, and strengthen, the relationship between farmers and their processors.

To this end, the dairy industry code of conduct has been instrumental in addressing the lessons from the milk crisis and putting in place measures to provide greater stability and certainty, such as preventing milk price step downs and establishing a mechanism to manage contract disputes between farmers and processors.

The Government is scheduled to review the code this year and determine its true impact now that it has been in place for more than 12 months.

More broadly, the industry has sought to move forward through the development of the Australian Dairy Plan.

It has been well-documented that the Dairy Plan aims to unite the industry and improve confidence and profitability across the supply chain.

A key pillar of the Plan specifies a commitment to restore trust and transparency along the dairy supply chain, in an acknowledgment that the spectre of the milk crisis still hovers over our industry.

But it also recognises a genuine desire to work together, repair relationships and build a strong future.

Much has changed in the past five years, but one constant is the need for farmers to retain a strong, independent voice.

Our farmer representatives — Australian Dairy Farmers and the state dairy farmer organisations — remain committed to passionately representing the views of dairy farmers and protecting their interests.

● Terry Richardson is Australian Dairy Farmers president

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