Media Release

Collective bargaining guide for dairy farmers

19 November 2014

In an excellent example of industry working for industry, Dairy Australia has today released a guide for dairy farmers with tips and case studies about the benefits of collective bargaining with companies buying their milk.

Launching the guide on a dairy farm near Taree, Minister for Agriculture, Barnaby Joyce, said the guide was timely given the issues currently facing the dairy industry.

“My goal as Minister is to improve farmgate returns for farmers. That is why I have been so keen to establish new markets and expand existing ones for Australian agriculture, such as in the Middle East and in Asia,” Minister Joyce said.

“I’ve been listening to our dairy farmers, and one of the things I’m hearing the most is how much the big supermarkets and their $1 a litre milk campaigns hurt.

“While lower prices at the checkout benefit consumers, lower prices at the farmgate are not sustainable for Australia’s dairy farmers.

“Farms banding together to form a collective brings volume, and with volume comes bargaining power.

“Savings could be made through sharing negotiation, legal and transport costs, and better deals could be struck with milk buyers by, for example, guaranteeing supply year round.”

Dairy Australia’s Collective Bargaining for Dairy Farmers includes information on key steps to becoming a collective, legal issues to consider, as well as case studies to illustrate how and why existing groups have succeeded and, in one case, failed – and the lessons learnt.

The launch of this guide is timely as Australian Competition and Consumer Commission Chairman Rod Sims recently highlighted the public benefit in allowing collective bargaining. Such arrangements seek to address imbalances in bargaining power, especially for primary producers in their dealings with larger businesses.

“According to industry figures, there are 6400 dairy farms across the country, 98 per cent of which are family-owned. Dairy is worth $13 billion to the Australian economy, including exports worth $2.7 billion in 2013–14,” Minister Joyce said.

“The dairy industry is a significant contributor to the Australian economy and providing support material like this to benefit industry members should be the aim of every levy-funded company.

“Increasing returns to the farmgate and supermarket powers are key themes raised in the Agricultural Competitiveness Green Paper I released in October and I encourage farmers across all industries to have their say on these issues, and others.

“In the Green Paper I have also highlighted a potential role for cooperatives as a means of improving farm gate returns, giving individual farmers the capacity to reach further down the supply chain and achieving fairer prices for their product.

“That is why I am so pleased to be launching this guide today—because people working together can get a better, fairer price for the produce that they work so hard for.”

Dairy Australia is the national levy-funded services body for the dairy industry aiming to help farmers adapt to a changing operating environment, and achieve a profitable, sustainable dairy industry.

The Collective Bargaining for Dairy Farmers is available online at dairyaustralia.com.au/Business-and-financials/Guide-to-collective-bargaining.aspx.

To have your say on the Agricultural Competitiveness Green Paper, visit agriculturalcompetitiveness.dpmc.gov.au.