A standard form milk supply agreement template, developed by Australian Dairy Farmers, was released earlier this month. The farmer group was contracted by the Federal Government to develop a template that incorporates all elements of the Code and can be used by farmers and processors in negotiating contracts.
The Code of Conduct, which came into effect on January 1 2020, requires most dairy processors to publish standard form milk supply agreements on their websites by June 1 and farmers and processors are being reminded to ensure all new agreements comply with the new Code of Conduct.
“It is extremely important that farmers and processors comply with the Code of Conduct so that they don’t risk being penalised in a way that could jeopardise their business,” ADF president, Terry Richardson said.
The Australian Competition and Consumer Commission (ACCC) in its 2018 dairy inquiry, made several recommendations related to contracting practices, including that milk supply arrangements should be acknowledged in writing, processors should provide farmers with all contractual documents before the start of their agreement, and that those agreements should be simplified.
The Code does not apply to farmers and processors with a milk supply agreement that was entered into before January 1 2020, unless that contract is varied or renewed and all must comply from January 1 2021.
