One year on from the dairy crisis and the industry is at a vital crossroads.
Farmers are still suffering the consequences of milk price cuts instigated by major processors last April, and every player in the dairy industry agrees that the sector needs to take a strong approach to ensure this situation never happens again.
But there is still concern over the best way to get the industry back on track.
For months, the United Dairyfarmers of Victoria has been locked in negotiations with Australian Dairy Farmers and other industry organisations over implementing a voluntary code of practice.
While most feedback has been supportive, there is still confusion over why a voluntary code would provide farmers with greater assurance than a mandatory code.
Our objective is to ensure that as many dairy companies as possible, if not all, sign on.
This has given commentators reason to declare, “Surely, a mandatory code would be better for farmers because everyone would have to abide by it.”
However, on closer inspection, this just isn’t the case.
Contrary to some people’s views, a mandatory code doesn’t mean it’s mandatory to sign up.
There is no capacity to force a dairy company to sign onto a mandatory code.
A voluntary code would have a significantly greater chance of getting all dairy companies to follow the terms and conditions. It would provide a stronger ability for farmers and processors to apply industry peer pressure to have all dairy companies sign up and achieve the outcome we need.
Once a contract is signed subject to the voluntary code, it would become legally binding and farmers would have the right to take legal action if it’s broken.
The industry is working hard to achieve a positive culture.
Our expectation is that a voluntary code will be central to this objective, whereas a mandatory code would create a negative culture of enforcement.
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.
A voluntary code of practice is another strong example of where we work collectively and in good faith to achieve outcomes which benefit farmers.
*Adam Jenkins, United Dairyfarmers of Victoria president.