THE United Dairyfarmers of Victoria is calling on processors to end the pricing uncertainty they’ve created for dairy farmers.
“Not only have Murray Goulburn and Fonterra cut milk prices, they’re clawing back what they’ve already paid to farmers, backdated to the start of the season (1 July 2015),” UDV President Adam Jenkins said.
“The UDV wants MG and Fonterra to review and ultimately remove these claw-back clauses from their supply contracts, so we never see a repeat of what’s happened this season.
“Why should dairy farmers pay for the poor management decisions of these dairy processors?”
UDV is listening to its members and working with other groups to gain legal advice on MG and Fonterra’s legal obligations to suppliers under existing contracts.
“We’re also calling on the processors to make announcements on the opening season price as soon as possible so that farmers have the certainty they need to plan for the season ahead.”
The UDV wants the current milk pricing structures offered by dairy processors to be reviewed.
“We need a pricing system that builds resilience, not one that makes farmers more vulnerable,” Mr Jenkins said.
“We want to restore confidence in the dairy industry and work towards a sustainable profitable future.”
In the meantime the UDV is focusing on the immediate issues of helping farmers through the next few weeks and prepare for the season ahead.
“Our priority is helping farmers and communities deal with this sudden milk price drop,” Mr Jenkins said.
“What matters is what we can do now. We’re working on getting more State Government and industry resources into helping dairy farmers reassess their finances in the wake of these price cuts.
Mr Jenkins said the UDV was:
– Reviewing MG and Fonterra’s obligations to suppliers under existing contracts, with the aim of removing claw-back provisions.
– Working with State Government’s industry taskforce to identify services that can be brought into play to help farmers. This includes rural financial counsellors, expanding the Taking Stock program and employing farm consultants to give one-on-one advice.
– Calling on processors to announce the opening prices for the 2016-17 season – so farmers can adjust or refinance their businesses for the coming season.
– Meeting with the banks to discuss the implication of the milk price cuts on farm equity and loan portfolios. Working with banks in attempt to alleviate further stresses and make sure they understand the dairy situation.
– Listening to farmers, service providers and community members to gain a better understanding of the potential long-term impact on the dairy industry.
– Exploring whether the existing Victorian Farmers Federation run Look Over the Farm Gate can be extended. The fund trains and delivers events that encourage farmers to help each other and get together at social events to share their stories and have a break from the farming.
– Urging processors to take responsibility to help suppliers through this crisis, by identifying those farmers in greatest need and offering them support and financial advice.
“We encourage all farmers to support each other (and members of the community) so that we can work together to get through this tough time,” Mr Jenkins said.
