It is a win win situation

Oct 07, 2016

Collaboration is the key to get us where we need to be. Our industry relies on all the elements to operate effectively. Farmers need processors and vice versa – so the solutions require all of us to come together to ensure a positive future. It is a win win situation.

It is one thing to constantly pick apart the industry to highlight the problems, it is another to actually work together to bring about real solutions to ensure this never happens again.

Last week the Australian Dairy Farmers held an important meeting with state dairy organisation presidents and processors to address a range of contractual issues which farmer organisations have been trying to address and rectify for 15 years.

During the meeting we discussed a range of topics including the difficult circumstances of farm gate price reductions, the introduction of new legislation on unfair contracts which comes into effect in November and the outcomes from the August Symposium held by Deputy Prime Minister, Barnaby Joyce.

This meeting provided an ideal opportunity for the dairy industry to unite and develop a voluntary industry wide code of practice on contractual arrangements with farmers.

The code will include:

  - greater transparency in contracts and supply agreements

  - ensuring a pricing formula or a price setting mechanism is clearly defined within a contract

  - ensuring pricing adjustments to farmers throughout a contract are clearly defined and that there will be no retrospectivity

  - while acknowledging step ups do occur and step downs have occurred in severe circumstances, a principle should be incorporated into contracts which clearly outlines that as much notice as possible is necessary if a step-down has to occur

  - ensuring farmers should receive all payments that accrue over the term of a contract or supply agreement – the final payments of a contract should not be contingent on the farmer being a supplier when, for example, the June payment is made in mid-July

  - ensure that where a processor has a contracted volume limit or a different price for volume above a particular level then exclusivity of supply to that processor must not occur

  - ensuring there is a clearly defined mechanism for giving notice of termination of a contract

  - ensuring there is a clearly defined mechanism of how contract terms and conditions can be modified and the farmer having the right to a negotiated variation, not simply a request from the processor.

Incorporating these principles into a code of conduct will give farmers, or their representative, the opportunity to have a contract or supply agreement which is truly negotiated and not simply an agreement which is a “take it or leave” it approach to farmer’s milk supply arrangements.

The ADF together with the state member organisations have worked hard since the crisis unfolded to ensure future milk supply agreements are balanced, fair and transparent. It has been a long process to get to this stage and a major breakthrough for the entire industry.

State dairy farmer organisations have been working to achieve these improvements for many years. By having a national organisation which is well resourced the States can achieve things together that would be impossible to achieve on their own.

We plan on finalising the draft code as soon as possible, ahead of the new legislation and before the Australian Competition and Consumer Commission inquiry into the dairy industry is finalised next year.

Now more than ever, the dairy industry needs to remain focused and united in its goals to achieve a shared vision of improving the profitability and sustainability of dairy farmers and the entire dairy industry in Australia.

David Basham

Acting ADF President

 

 



Coalition Continues Support for Australian Dairy Farmers

Aug 08, 2016

The ADF has heard from Minister Joyce that he will be convening a symposium on dairy issues as part of the Coalitions election commitments. The ADF will be working hard with state organisation members over the next few weeks to prepare for the Symposium.

We expect it will provide an opportunity to discuss the major issues facing the industry including $ milk, fair contract terms and conditions, a world dairy commodity pricing index, issues in WA where some farmers have been given notice of not being picked up and backpacker tax, to name a few of the high priority issues.

While we have welcomed the Governments support package we continue to urge changes to the criteria for access to most elements of the Governments support package, particularly the concessional loans package.

The plan announced in the lead up to the 2016 election, included $555 million in concessional loans with 10-year loan terms, $20 million for an upgrade to Gippsland irrigation infrastructure, $2 million to establish a commodity milk price index and $1.8 million to provide business and financial counselling.

I urge all farmers to not self-assess whether they are eligible for the concessional loans support package. We know many have had difficulty with access and we have been able to use some of these experiences in our ongoing discussions with the Department for changes to the eligibility criteria.

The Prime Minister and Deputy Prime Minister will be meeting with the Murray Goulburn Board to discuss the global and domestic challenges facing Australian dairy farmers. It will be interesting to hear the outcome of this meeting. Mr. Joyce will then convene the dairy farmer symposium with the Department of Agriculture and Water Resources

The ongoing support and commitment of government is essential for us to successfully navigate through these trying times so we are able to provide innovative and practical solutions to help farmers achieve a sustainable level of profitability. We need to ensure that the solutions we present are in our farmers’ best interests, so they can take control of their situation and make informed choices.

ADF thanks Barnaby Joyce for maintaining this election promise and his continued commitment to seeking solutions to the current dairy situation.

David Basham

Acting ADF President


 

Industry sustainability commitments recognised

Jun 14, 2016

Keeping Australian dairy in business for the long term. This was the catch-phrase of the Australian Dairy Industry Sustainability Framework when it was first endorsed by the Australian Dairy Industry Council (ADIC) in 2012.

This long term thinking is especially relevant today, says the Chair of the Framework’s Steering Committee, Chris Griffin, a Gippsland dairy farmer.

“The Australian dairy industry is facing unprecedented challenges, yet securing our industry’s triple bottom line approach to sustainability remains as important as ever,” Chris says.

“Although the industry’s immediate priority is to support dairy farmers through the recent step downs, the Framework helps us keep an eye on the horizon. Importantly it tracks our progress and drives practice change where necessary to ensure the industry is sustainable for the long term.”

In June, the ADIC was recognised for its sustainability framework by the United Nations Association of Australia (UNAA) with its 2016 Organisation Leadership Award.

Judges said that the Framework was “exceptional and inspiring, particularly its whole-of-supply-chain focus; rigorous targets and reporting; impacts to date; stakeholder and community involvement; and communication”. They also recognised the Framework’s potential to act as a model for other whole-of-industry approaches for an even broader impact.

Further acknowledgement of the value of the Framework and support for dairy farmers’ commitment to sustainable production comes from Ian McConnell at WWF Australia, a member of a stakeholder reference group for the project, the Dairy Sustainability Consultative Forum.

“The value of the Framework is helping the dairy industry to know where the pressure points are coming from,” says Ian.

“By being in front of the issues, the industry can better shape its response. And when issues do emerge, such as pricing or producer profitability, it can be in more control and shape the conversation.

“It’s not just about the milk. The Framework helps Australian dairy to tell the wider story about the industry and its producers.”

Whenever a dairy farmer takes steps to improve their business or their practices, or reduces their environmental impact, they are contributing to the industry’s progress on sustainability under the Framework,” says Chris.

“The challenge is to make sure we are focussed on targets that will deliver the best outcomes for the industry, the community and the environment.”

For more information, visit www.dairysustainabilityoz.com.au

 

Support for all farmers - no exceptions

Jun 03, 2016

Dairy industry leaders are united around a clear objective: to ensure every Australian dairyfarmer has the capability, tools and support to fully understand their individual business position, and to make decisions about their future based on sound evidence.

The release of Dairy Australia’s Situation and Outlook report last week reinforced that there are tough times ahead – but also that with collaboration, empathy and leadership, measured policy responses and effective support from government, consumers and our own supply chain, we can work towards a stronger future.

To prepare for the next season farmers must have earlier and clearer pricing signals, with a more equitable pricing system that better balances risk along the supply chain of farmers, processors and retailers. Without this, farmers and allied businesses will remain vulnerable. ADF and our state members continue to urge processors to urgently communicate their opening price as soon as possible.

Commonwealth and State Government support in Tasmania, Victoria and South Australia has bolstered programs to strengthen pathways for dairyfarmers and enhanced our ability to support the health and wellbeing of our own. We need detail on these announcements as soon as possible and have been pressing governments to release the criteria for the Dairy Recovery Concessional Loans scheme immediately.

As the industry’s peak body, our longer-term resolution includes significant policy ambitions. We need a more equitable pricing system that better balances risk along the supply chain of farmers, processors and retailers.

To help farmers here and now it is crucial that the full suite of support measures be available to farmers across all dairying regions, as processors begin the process of setting milk prices to be paid from July 1. All dairyfarmers, not only Murray Goulburn and Fonterra suppliers, must have access to these measures. ADF has made this clear in our discussions with Government.

We are aware that the current challenges concern sharefarmers and dairy farm employees too. Dairyfarmers who have previously been ineligible for government assistance due to their permanent residency status are also on our radar. Ensuring our industry can retain skilled, experienced employees is key to safeguarding our future – a message we are taking to Canberra, to ensure all aspects of our workforce, and their needs in this unprecedented circumstance are not forgotten.

As the details are made more clear we will contact our members. We encourage you to keep reaching out to ADF, as well as your state dairy farming organisation and regional development programs to access support.

David Basham

ADF President

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