Dairy code doomed to fail farmers in disputes with milk processors


Australia’s first mandatory dairy code is doomed to fail farmers in disputes with processors, says a former mediation adviser to the Federal Government.

“It’s clear this exposure draft of the dairy code will not be effective on delivering flexibility nor finality in resolving disputes in the dairy industry,” Derek Minus said.

“It is nothing but a Claytons dispute resolution process that won’t work. This is a naive attempt to put something together without understanding how it will work.”

Mr Minus, appointed by the Federal Government as a mediation adviser under the petroleum, franchising and horticulture codes, highlighted key flaws in the dispute resolution process.

He said the code simply stated: “A milk supply agreement ‘may’ provide for mediation or arbitration as a means for resolving disputes between parties to the agreement”.

He said arbitration could only occur if it was offered and agreed to by both farmer and processor in a milk supply agreement or at some later time once a dispute had arisen, “an unlikely event at best”.

Even when both parties had agreed to arbitration, Mr Minus said the code allowed either party to terminate the arbitration, avoiding a determination — “something that is unknown in commercial arbitrations”.

He also criticised the failure of the code to allow for mediation in multi-party disputes, where many dairy farmers could work together, which the Australian Competition and Consumer Commission had called for in other codes.

Federal Agriculture Minister Bridget McKenzie’s spokeswoman said the code was not finalised and remains under consultation.

Meanwhile the Queensland Dairy Organisation has lashed out at the code.

“Putting it bluntly, the initial intent of the code has been significantly watered down in the interests of processors over farmers in this draft,” QDO President Brian Tessmann said.

He said there were still three primary areas not covered or remedied by the code:

EXCLUSIVITY clauses are still allowed and are a part of contracts between processors and farmers.

THE code should cover the conduct of retailers.

THE disparity between the contract period (usually 3-5 years) and fixed pricing period (usually 12 months only).

Original article sourced from https://www.weeklytimesnow.com.au/

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