Australia’s Dairy Industry: Rebuilding Trust and a Fair Market For Farmers Report Released

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Australia’s Dairy Industry: Rebuilding Trust and a Fair Market For Farmers Report Released

The Senate Committee on Economics has released its long awaited report into the Australian Dairy Industry. Following the collapse of milk markets in 2016 and retrospective price cuts affecting farmers, the integrity of the dairy industry became the focus of the Senate Inquiry. The crisis was fuelled by a reliance on the international market and large power imbalances in contractual design between milk producers and processors. The Committee was also tasked specifically with looking at the behaviour of Murray-Goulburn as a company that imposed retrospective debts on dairy suppliers at the height of the crisis in the 2015-16 season. Notably, the Committee questioned whether Murray-Goulburn’s current capital structure is in its member’s best interests.

The Committee made the following recommendations:

  1. The Australian Competition and Consumer Commission (ACCC) should, as a part of its ongoing inquiry into the dairy industry, evaluate the extent to which the code of conduct will reduce power imbalances between farmers and processors;
  2. Require the ACCC to investigate the potential of collective bargaining in the industry;
  3. Require an independent party to review the code of conduct for contractual relationships;
  4. Develop an education campaign to inform consumers;
  5. Require dairy processors to set opening prices conservatively;
  6. Require an independent review of the Government’s dairy support package;
  7. Require the ACCC to investigate whether unfair contract terms exist in the dairy industry;
  8. The Competition and Consumer Amendment (Small Business Access to Justice) Bill 2017 (Cth) be passed;
  9. The Government work to reduce the regulatory burden across the co-operative sector and support the development of new co-operatives;
  10. Require regulators to reconsider publicly released information;
  11. Discontinue the development of the Dairy Commodity Price Index;
  12. Review of the Dairy Services Levy and Dairy Australia.

The ACCC will release their report into dairy industry practices by 1 November 2017. The Committee’s Report in full can be read here.

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