❓ The Minister for Agriculture, Forestry and Fisheries reports positive developments in dairy farmer contracts, including price increases and removal of punitive clauses, following concerns raised about unconscionable terms. The Challenge Co-operative's role in stabilising milk prices is acknowledged.
AnsweredQoN 766Legislative Council
QuestionView source ↗
Will the minister advise of any developments in contracts between dairy farmers and milk processing companies, some elements of which the minister described as unconscionable in an address given to the Western Australian Farmers Federation dairy conference in Busselton in July? Hon KIM CHANCE
AnswerView source ↗
I thank the convener of country Labor for some notice of this question! During my address to the WAFF dairy conference, I pointed to my dissatisfaction with certain contractual arrangements existing within the industry, which had at that time resulted in Australia’s, and possibly the world’s, lowest farmgate milk prices. I am pleased to report that since then there have been some extremely positive developments. Not only have current contract price levels risen substantially since then, but also some of the most punitive aspects of the contracts have been removed. This has resulted in a much more stable and positively focused industry. I acknowledge the role of the processing companies in recognising the need to support the call that I made for a more united industry. For example, some of the contracts had very punitive provisions with regard to the oversupply and undersupply of milk. Shortly after the dairy conference I met with senior representatives of a major milk processor in Melbourne, and in that meeting, which involved a frank exchange of views, I believe that that particular company emerged with a better understanding of the difficulties faced by Western Australian milk producers. We have now seen a 5c a litre increase in a heavily discounted generic milk product. This increase seems in large part to have been passed on to producers who supply that processor. Although this has had a significant benefit, it is important to acknowledge the fundamental role that has been played in the stabilisation of milk prices by the Challenge Co-operative. Challenge has been able to help create an effective floor in the market for farmgate milk, and the other processors have had to lift their prices in order to maintain their supply requirements. I still regard the level of farmgate milk prices as extremely unsatisfactory. However, the member can be assured that the Government will continue its proactive efforts to achieve the highest possible return for producers in the now deregulated wholemilk market.
Hon KIM CHANCE replied: I thank the convener of country Labor for some notice of this question! During my address to the WAFF dairy conference, I pointed to my dissatisfaction with certain contractual arrangements existing within the industry, which had at that time resulted in Australia’s, and possibly the world’s, lowest farmgate milk prices. I am pleased to report that since then there have been some extremely positive developments. Not only have current contract price levels risen substantially since then, but also some of the most punitive aspects of the contracts have been removed. This has resulted in a much more stable and positively focused industry. I acknowledge the role of the processing companies in recognising the need to support the call that I made for a more united industry. For example, some of the contracts had very punitive provisions with regard to the oversupply and undersupply of milk. Shortly after the dairy conference I met with senior representatives of a major milk processor in Melbourne, and in that meeting, which involved a frank exchange of views, I believe that that particular company emerged with a better understanding of the difficulties faced by Western Australian milk producers. We have now seen a 5c a litre increase in a heavily discounted generic milk product. This increase seems in large part to have been passed on to producers who supply that processor. Although this has had a significant benefit, it is important to acknowledge the fundamental role that has been played in the stabilisation of milk prices by the Challenge Co-operative. Challenge has been able to help create an effective floor in the market for farmgate milk, and the other processors have had to lift their prices in order to maintain their supply requirements. I still regard the level of farmgate milk prices as extremely unsatisfactory. However, the member can be assured that the Government will continue its proactive efforts to achieve the highest possible return for producers in the now deregulated wholemilk market.
I thank the convener of country Labor for some notice of this question! During my address to the WAFF dairy conference, I pointed to my dissatisfaction with certain contractual arrangements existing within the industry, which had at that time resulted in Australia’s, and possibly the world’s, lowest farmgate milk prices. I am pleased to report that since then there have been some extremely positive developments. Not only have current contract price levels risen substantially since then, but also some of the most punitive aspects of the contracts have been removed. This has resulted in a much more stable and positively focused industry. I acknowledge the role of the processing companies in recognising the need to support the call that I made for a more united industry. For example, some of the contracts had very punitive provisions with regard to the oversupply and undersupply of milk. Shortly after the dairy conference I met with senior representatives of a major milk processor in Melbourne, and in that meeting, which involved a frank exchange of views, I believe that that particular company emerged with a better understanding of the difficulties faced by Western Australian milk producers. We have now seen a 5c a litre increase in a heavily discounted generic milk product. This increase seems in large part to have been passed on to producers who supply that processor. Although this has had a significant benefit, it is important to acknowledge the fundamental role that has been played in the stabilisation of milk prices by the Challenge Co-operative. Challenge has been able to help create an effective floor in the market for farmgate milk, and the other processors have had to lift their prices in order to maintain their supply requirements. I still regard the level of farmgate milk prices as extremely unsatisfactory. However, the member can be assured that the Government will continue its proactive efforts to achieve the highest possible return for producers in the now deregulated wholemilk market.
Shortly after the dairy conference I met with senior representatives of a major milk processor in Melbourne, and in that meeting, which involved a frank exchange of views, I believe that that particular company emerged with a better understanding of the difficulties faced by Western Australian milk producers. We have now seen a 5c a litre increase in a heavily discounted generic milk product. This increase seems in large part to have been passed on to producers who supply that processor. Although this has had a significant benefit, it is important to acknowledge the fundamental role that has been played in the stabilisation of milk prices by the Challenge Co-operative. Challenge has been able to help create an effective floor in the market for farmgate milk, and the other processors have had to lift their prices in order to maintain their supply requirements. I still regard the level of farmgate milk prices as extremely unsatisfactory. However, the member can be assured that the Government will continue its proactive efforts to achieve the highest possible return for producers in the now deregulated wholemilk market.
Hon KIM CHANCE replied: I thank the convener of country Labor for some notice of this question! During my address to the WAFF dairy conference, I pointed to my dissatisfaction with certain contractual arrangements existing within the industry, which had at that time resulted in Australia’s, and possibly the world’s, lowest farmgate milk prices. I am pleased to report that since then there have been some extremely positive developments. Not only have current contract price levels risen substantially since then, but also some of the most punitive aspects of the contracts have been removed. This has resulted in a much more stable and positively focused industry. I acknowledge the role of the processing companies in recognising the need to support the call that I made for a more united industry. For example, some of the contracts had very punitive provisions with regard to the oversupply and undersupply of milk. Shortly after the dairy conference I met with senior representatives of a major milk processor in Melbourne, and in that meeting, which involved a frank exchange of views, I believe that that particular company emerged with a better understanding of the difficulties faced by Western Australian milk producers. We have now seen a 5c a litre increase in a heavily discounted generic milk product. This increase seems in large part to have been passed on to producers who supply that processor. Although this has had a significant benefit, it is important to acknowledge the fundamental role that has been played in the stabilisation of milk prices by the Challenge Co-operative. Challenge has been able to help create an effective floor in the market for farmgate milk, and the other processors have had to lift their prices in order to maintain their supply requirements. I still regard the level of farmgate milk prices as extremely unsatisfactory. However, the member can be assured that the Government will continue its proactive efforts to achieve the highest possible return for producers in the now deregulated wholemilk market.
I thank the convener of country Labor for some notice of this question! During my address to the WAFF dairy conference, I pointed to my dissatisfaction with certain contractual arrangements existing within the industry, which had at that time resulted in Australia’s, and possibly the world’s, lowest farmgate milk prices. I am pleased to report that since then there have been some extremely positive developments. Not only have current contract price levels risen substantially since then, but also some of the most punitive aspects of the contracts have been removed. This has resulted in a much more stable and positively focused industry. I acknowledge the role of the processing companies in recognising the need to support the call that I made for a more united industry. For example, some of the contracts had very punitive provisions with regard to the oversupply and undersupply of milk. Shortly after the dairy conference I met with senior representatives of a major milk processor in Melbourne, and in that meeting, which involved a frank exchange of views, I believe that that particular company emerged with a better understanding of the difficulties faced by Western Australian milk producers. We have now seen a 5c a litre increase in a heavily discounted generic milk product. This increase seems in large part to have been passed on to producers who supply that processor. Although this has had a significant benefit, it is important to acknowledge the fundamental role that has been played in the stabilisation of milk prices by the Challenge Co-operative. Challenge has been able to help create an effective floor in the market for farmgate milk, and the other processors have had to lift their prices in order to maintain their supply requirements. I still regard the level of farmgate milk prices as extremely unsatisfactory. However, the member can be assured that the Government will continue its proactive efforts to achieve the highest possible return for producers in the now deregulated wholemilk market.
Shortly after the dairy conference I met with senior representatives of a major milk processor in Melbourne, and in that meeting, which involved a frank exchange of views, I believe that that particular company emerged with a better understanding of the difficulties faced by Western Australian milk producers. We have now seen a 5c a litre increase in a heavily discounted generic milk product. This increase seems in large part to have been passed on to producers who supply that processor. Although this has had a significant benefit, it is important to acknowledge the fundamental role that has been played in the stabilisation of milk prices by the Challenge Co-operative. Challenge has been able to help create an effective floor in the market for farmgate milk, and the other processors have had to lift their prices in order to maintain their supply requirements. I still regard the level of farmgate milk prices as extremely unsatisfactory. However, the member can be assured that the Government will continue its proactive efforts to achieve the highest possible return for producers in the now deregulated wholemilk market.
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