Monday, 29 August 2016 09:54

Opinion: Fairer contracts worth fighting for

Written by  Tim Bale, Chairman, Manning Valley Fresh Group

A CONTRACT is a legal document agreed to by two parties who willfully and keenly sign together to form a mutually beneficial relationship for both.

Does that sound like a milk supply agreement?

I don’t think so.

What happens when a farmer refuses to sign an agreement which is not in his best interest, someone else signs, or the milk is picked up anyway and the farmer deemed to have agreed.

The ACCC believes that collective bargaining will help and it has in the past, but sadly only when companies are looking for milk.

At the moment large processors are snubbing the collective bargaining groups and co-op’s don’t recognise them because their members could be said to be a collective bargaining group, but if you are a co-op member have you ever negotiated your price?

The lack of power in the Australian dairy industry and the fragmentation of leadership is an ongoing problem but we need to start somewhere and I agree – farmer contracts are a start.

Firstly, the exclusivity of supply is not fair and reasonable.

If a farmer contracts a certain volume, he should be able to sell over contract milk to anyone he likes. Contracts should not be exclusive.

Secondly, if a farmer elects to sign a longer term contract, then the price must be set for that period.

The right to negotiate should be ongoing by both parties.

Perhaps major retailers should be pressured to ensure the milk they buy from processors are from farmers with fair and reasonable agreements.

The third most important part is price and recently the drops have seen processors in NSW drop their price when they are not affected by export and their retail contracts have not changed.

Fairer contracts will make it easier for farmers to choose, but all farmers have to help, support the leaders, come to meetings, speak out and remember there is nothing wrong with expecting a fair go.

 

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