Voluntary code is way to avoid milk price shock

A voluntary code of conduct is the favoured way to get the national dairy industry back on track following last year’s milk crisis, says Victoria’s peak dairy lobby.
The United Dairyfarmers of Victoria (UDV) has been locked in negotiations with industry groups since late last year hashing out terms of reference for a voluntary code with the aim that farmers will no longer bear the brunt of poor decisions made along the dairy supply chain.
“Australian dairy farmers need to have a say in how our contracts and supplier agreements are determined and what is reasonable, and a voluntary code is integral to achieving that outcome,” Mr Jenkins said.
“This has never been done before in the dairy industry.
“The end goal is to help processors and others in the supply chain adhere to the unfair contract legislation brought in last year by the Federal Government.
“It is vital that all players in the dairy industry meet their legal obligations.”
Mr Jenkins said that commentary over the value of imposing a voluntary code of conduct over a mandatory code was counter-productive to solving problems across the dairy supply chain.
“What a lot of people don’t realise is that it is not compulsory to sign up to a mandatory code. There is no capacity to force a dairy company to sign onto a mandatory code,” he said.
“It is important we have as many dairy companies as possible to sign onto the code and a voluntary code has a significantly greater chance of getting this outcome.
“Farmers and processors will be in a stronger position to apply peer pressure to ensure our industry conforms to legal requirements.”
Mr Jenkins said the UDV expected a voluntary code to become part of the positive culture of the dairy sector following the dramatic milk price cuts that last year rocked the industry.
“It’s an achievement of the dairy industry that in tough times we’ve been able to band together to come up with real solutions to improve industry practice,” he said.
“No one wants to see the milk crisis repeat itself, so it’s important we obtain clarity and simple clear pricing mechanisms in our future supply agreements and contracts.”