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

 

 



Reviews of supply contracts, pricing system underway

Jun 17, 2016

Dairy farmer representatives on the ADF Markets, Trade and Value Chain Policy Advisory Group (PAG) gathered in Melbourne this week to discuss a range of measures to establish a fairer, more transparent dairy market.

Simplifying supplier contracts and agreements featured heavily and methods to make them simpler and more transparent. Further to this the lack of transparency regarding milk pricing, and its ability to be retrospective is unacceptable and must be addressed.

The PAG also reviewed the methods to give clear, independent and credible market and price signals to dairy farmers and how this might be practically applied to the Australian dairy market.

Providing farmers with the right tools and resources to manage the opportunities and risks associated with a fluctuating dairy market was also a focus to help bolster the industry’s resilience in the long term.

Significantly, the meeting agreed upon the need to modernise the Australian industry’s pricing structures and contracts to recognise the complex operating environment that farmers face, to better balance financial risk along the supply chain. ADF is working with all state members, levels of Government and industry to achieve these endeavours.

ADF continues to press for the release of the full dairy support package as soon as possible and will update farmers as soon as this information is released.

We have had a couple of operational changes at ADF in recent weeks, with the resignation of ADF CEO Benjamin Stapley announced yesterday. The ADF Board has already taken steps to ensure that the role of CEO is well served in both the short and long term.

Contact has already been made with former ADF CEO John McQueen, now an industry consultant, to step into this important leadership role on an interim basis while the recruitment process is completed. Mr McQueen steps into the role as early as Monday morning and there will be a smooth, effective transition so no time is lost in fulfilling ADF’s mission to lobby for a stronger future for Australian dairy farmers.

These are unprecedented times and we need to ensure we have the right leadership balance to effectively address these issues, while not losing sight of other priorities important to building farmers long term sustainability.

The small team at ADF, remains committed to driving strong policy to transform the way our industry operates for the better.

Many farmers have been calling our offices in recent weeks seeking advice, assistance and information on what ADF is doing on their behalf. We encourage you to keep connecting with ADF to ensure we effectively represent your interests.

 

David Basham

Acting ADF President

Early pricing signals essential

Jun 10, 2016


Many in the dairy industry feel under enormous pressure at the moment. Farmers not only have the challenge of adapting their business plans to recent price shocks – we also pick up the paper to read about it every day. With more processors' opening milk prices due in coming weeks, following Warrnambool Cheese and Butter’s (WCB) announcement today, no doubt some will feel the pressure begin to mount once more.

We recognise that the announcement from WCB will come as a shock to many, given it is well below the cost of production. Despite the disappointing low price, we must recognise that they have heeded calls for early price signals and provided much needed certainty to their suppliers.

While we are an industry under pressure, we are also an industry that has the know-how and motivation to overcome these adversities and thrive in the long term. No one is alone in this scenario and we need to ensure that all farmers feel supported during tough times.

ADF, together with our state members and Dairy Australia is fighting for our farmers. We can’t solve all of the issues farmers are currently facing, but we can work to relieve some of the immediate pressures and accelerate change to ensure this doesn’t happen again.

We have welcomed the promises made by State and Federal Government, now they must stop playing politics and deliver. Farmers need certainty as to their options right now.

While we await Government decisions, there are industry resources available to help farmers manage the impact of recent events. It’s important to make the time to take up these opportunities. Dairy Australia’s Taking Stock provides free one-to-one business analysis that can help you prepare for the season ahead.

The Dairy Farmer Central website launched this week by the Victorian dairy industry, lists all of these tools and more. It also signposts events - some of these events will inform and help you plan for the season ahead, others provide an opportunity to take time out from the farm and get some perspective. We are working to make this website applicable Australia-wide.

These tools are not a silver bullet to restore our businesses but they will help navigate the challenges, so we can move toward a stronger, fairer and more sustainable future.

David Basham

ADF Acting President

An exciting leadership development opportunity awaits…

Mar 10, 2016

Looking for a way to build your leadership capabilities in preparation for further involvement with the industry, and your community? The Emerging Dairy Leaders Program (EDLP) could be the perfect opportunity for you.

The recently announced EDLP provides an outstanding opportunity for potential and current leaders across the sector to build their leadership skills and capacity to contribute to development of the Australian dairy community.

Australian Dairy Farmers and Dairy Australia have established the program to invest in the development of the industry’s people by further expanding on existing leadership programs available. 

The program will run over the course of a year, commencing April 26 and concluding April 2017 in Adelaide. The aim of the EDLP is to help emerging leaders to better understand themselves and others and therefore how to improve their communication skills and teamwork.

The program will feature a variety of learning and networking opportunities—including exposure to leaders and experts as well as challenging assignments. This provides a rich development experience with long-lasting practical outcomes for participants and the community.

Participants in the program will earn a Diploma of Agribusiness Management from the National Centre for Dairy Education/TAFESA using a variety of learning tools such as online self-paced study, webinars, peer discussion, workplace and mentor discussions. The EDLP participants will also be eligible to take part in the Developing Dairy Leaders Program afterward if interested.

All costs associated with education enrollment, travel, accommodation and meals while away from home will be covered by the program.

To apply or for further information head to the People in Dairy website or contract Program Coordinator, Karen Conrad via 0488 099 891. Applications open on Thursday 10 March 2016 and close on Monday 28 March 2016. 

 

 

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