Australian Dairy Farmers (ADF) has questioned Fonterra's and Murray Goulburn's decisions to not reimburse farmers who no longer supply them for last year's clawbacks.
"There are serious questions that must be answered about the fairness and equity of the financial impacts and treatment of those who had to move to other processors," interim ADF chief executive officer John McQueen said.
The actions of MG and Fonterra in late April/early May last year caused enormous heartache for farmers and the industry.
"Those impacted were hit hard," Mr McQueen said in a member update on Monday.
"It will take a long time for the farmers to recover and rebuild not just financially but their herd sizes, their confidence, and their emotional well-being."
Mr McQueen said these financial hits on farmers should never have happened.
"Through no fault of their own, farmers who left MG or Fonterra, did so because they had no other financial option," he said.
The lack of reimbursement to these farmers from changes to MG's Milk Supply Support Package and Fonterra Australia's Support Loans Package appears discriminatory and unfair.
While ADF acknowledges that both MG and Fonterra will be reimbursing existing (and retired) suppliers, they have both made a point to deny those farmers who are no longer suppliers, yet were equally financially disadvantaged.
ADF believes that farmers who were financially forced to leave their processor should not be forced to continue to bear the cost of processor actions.
"Trust and respect are important parts of any business relationship and this has been lost for many farmers who supplied and currently supply MG and Fonterra," Mr McQueen said.
"Not only has trust and respect been damaged but so too has industry confidence, and this will take a long time to restore.
"To ensure a positive future, our industry relies on all the elements to operate effectively.
"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 dairyfarmers and the entire dairy industry in Australia."
Mr McQueen said ADF would continue to work with both processors and farmers to rebuild confidence and trust.
"It will take time and will require a commitment by processors to treat their farmers as equal partners and with the respect they deserve," he said.