Interview with Warwick Long on Victorian Country Hour

28 October 2019

WARWICK LONG: Now we were going to have the Federal Agriculture Minister on the show today to ask where the final draft of the dairy code was but now it appears we have one and I will let the minister tell you more. Minister Bridget McKenzie, Federal Agriculture Minister Welcome to the Country Hour.

BRIDGET MCKENZIE: Fantastic to be with you Warwick.

WARWICK LONG: You're releasing the final draft for the dairy code today, in fact just now. What can you tell us?

BRIDGET MCKENZIE: Well we've based the exposure draft on the two consultations that the dairy industry went through prior to the election. We know we had those principles agreed and we've been busy drafting, bringing that date forward from June next year. We're going out to consultation this week, you've got until 23 November to actually get your comments in and I'm hoping all of industry will engage given we've got very distinct dairy districts across the country. As I've travelled around over the last five months, and visited each and every state and heard from their dairy leaders and farmers, there are very unique aspects to each and every one of our regions and this code has to be suitable for all. And I think we've got the balance right, based on the feedback of our farmers.

WARWICK LONG: Has it changed much since the last draft?

BRIDGET MCKENZIE: No, not at all. We've actually kept those nine principles that we took to consultation. The key clauses I see that our dairy farmers are very keen to see was requiring processes to publicly release their standard form agreement by a set date each year. This will stop processors being able to prey and game the system with different agreements for different farmers. We've established a dispute resolution process which will, I think, be fantastic especially when it's partnered with the other election commitment we took giving ADF - Australian Dairy Farmers - over $1.5 million to have financial and legal expertise within their organisation for farmers to be able to access when they're negotiating contacts with their processors and absolutely outlawing retrospective step downs.

And these are the sorts of issues that you will recall and your listeners will recall that came out of that ACCC inquiry, that the Nationals in Government grow post the drama that Victorian dairy farmers experienced with MG and Fonterra's behaviour. So we're delivering on that.

WARWICK LONG: [Talks over] I'm sure you would have been aware The Weekly Times have been reputing in the last week or so that there would be some changes in there that would allow processors to walk away from contracts with farmers. Is that the case?

BRIDGET MCKENZIE: Absolutely not. So the code has been drafted in line with the principles announced earlier this year. There is a clause, clause 6 about unilateral changes to the agreement and in very limited circumstances, unilateral variations can be made where external change is necessitated - not the relationship between the farmer and the processor, not any issues to do with the dairy industry itself, but absolutely with things like OH&S Legislation, Work Health and Safety Legislation et cetera. So the processor has to-

WARWICK LONG: [Talks over] Is that defined in the code?

BRIDGET MCKENZIE: Absolutely and so just to be very clear and this will be further outlined in the regulatory impact statement, and the explanatory memorandums et cetera, but section 27 is not designed to allow processors to change agreements however or whenever they like. We absolutely do not want to see that happen, but we have to also realise that in some instances where legislation occurs in other areas of government that impacts on a processor, they need to be able to address that. But they have a very high level of transparency about how they can apply to change those agreements. And I've also-

WARWICK LONG: [Talks over] So just because the global financial crisis is happening again or our trade relationship has changed, that's not a reason enough for a change in an agreement.

BRIDGET MCKENZIE:  No, it has to be relegated to legislative changes that need to be complied with for instance that will necessitate a change. And I just want processors to be on notice absolutely. We, as a government, are taking this code seriously and its implementation. It's why we're also setting up, within the ACCC, a group of dairy farmers and experts to oversee the implementation. And I've written to processors last week to say please do not rush out and pressure your dairy farmers and suppliers into new five-year contracts prior to the code coming in. This was an election commitment by the Morrison-McCormack Government. You knew this was coming. It hasn't changed a lot. So processors need to be conscious of that as they're heading into negotiate any new agreements. And I would now encourage farmers, if you don't like the agreement that's put before you, you are within your right to hold off and wait. And this code will be in place early in the new year.

WARWICK LONG: So this code won't cover contracts that have already been signed before it's in place?

BRIDGET MCKENZIE:  No, it's not retrospective, Warwick. And as you recall our election commitment was to have this in by June 2020. We've brought that forward by six months, which is great work. And bearing in mind-

WARWICK LONG: [Interrupts] Were you forced into that by One Nation?

BRIDGET MCKENZIE: Not at all Warwick. I was very much on the public record that we're going out to consult the first week of November. I was over with Nola Marino's dairy farmers in Southwest WA and they were very clear that we were going to expose a draft first week of November. So we've brought that a little bit forward because that will allow us to get it signed off by the Governor-General by the end of the year and therefore, implementing it quickly. But I do just want to let everyone know that if there are significant concerns from the dairy industry, obviously as we go through the consultation process, well then that - and we have to redraft - well, that will obviously necessitate extending this becoming a regulation.

But just on Pauline Hanson, as I've travelled around the dairy industry and the different regions, nobody has been raising the types of issues she's wanting to see change within the dairy industry. The dairy industry came together as one, voted to have a mandatory dairy code. We're delivering on that. We've got a suite of other initiatives to assist dairy farmers, to get a better milk price, to readdress that power imbalance that can sometimes exist and forget their input cost down. I mean, they're doing it tough - high energy prices, high grain prices can really take their toll.

WARWICK LONG:  [Talks over] So you think One Nation- Pauline Hanson, is getting some of her dairy information wrong?

BRIDGET MCKENZIE: Absolutely. I can tell you what I've heard. I've been to every single state. I've spoken to peak industry bodies and I've spoken to farmers on the ground. Yes, they're doing it tough-

WARWICK LONG: [Interrupts] Then why did the Government move forward its dairy mandatory code announcement, and why is everybody, I suppose, from the Canberra media crediting her party with making that happen?

BRIDGET MCKENZIE: You'll have to realise we want to deliver on election commitments earlier all the time, Warwick. Alright this was going to be rolled out over 12 months. National Party and Liberal Party MPs really were requesting to bring it forward and so we were bringing it forward as quickly as we could do. The opportunity arises to bring it forward another couple of weeks, well, we're going to take that. So at the end of the day this is our Government-

WARWICK LONG: [Talks over] All of that prompted speculation about your job. Are you safe as an Agriculture Minister and Deputy Leader of the Nationals?

BRIDGET MCKENZIE: Yes, Warwick, I am safe. And we're just getting on with the job of delivering for Australian farmers and growing our agriculture industry. You can see the Federal Government is completely focused on addressing the drought. We're also keen on opening new markets. And one of the first jobs for me was to take primary producers, including the dairy industry, overseas to look at export opportunities because it is about a mandatory dairy code. It is about processors saying to retailers, you know what? Australians have shown they're willing to pay more money for our beautiful milk. We need to see more of that flowing right through the supply chain back to the farm gates. And we're also looking at decreasing input costs to farmers so that they can be more competitive.

WARWICK LONG: Because you realise that's a completely different narrative to what we've been hearing about this over the last week or two. Is that frustrating then for you to be putting the opposite, really, of what we've been hearing about the development of this code and also your position in the party?

BRIDGET MCKENZIE: Well, Warwick, I can categorically say I've been publicly on the record that this exposure draft of the mandatory dairy code was going out in the first week of November [indistinct]. Now, here I am a week and a bit before the first week of November, and the draft code will be up on the Department's website. We're having tele-town halls. Every levy payer will get a text to have their input. We're also having the departments out in every single state to have public consultations. And if you've been a part of our previous consultations into this, you'll also be receiving direct communication to get involved. We want this code to work for all-

WARWICK LONG: So people can it read now. It's open for consultation for the next four weeks…

BRIDGET MCKENZIE: [Talks over] Today. Yep.

WARWICK LONG: …And then, the code itself will likely be in place by early in the new year. By January?

BRIDGET MCKENZIE:  Yeah. Well, barring any changes that are risen from this exposure draft consultation, absolutely in place by January, which I think will be a great- one of the planks that's needed to make sure our dairy farmers can have a decent negotiation standpoint with the processors and therefore get a fair price for their product.

WARWICK LONG: Well, it's been good to talk to you. Thanks for coming onto the program. And we'll talk to you soon. Thank you very much, Minister.

BRIDGET MCKENZIE: Always a pleasure. 

WARWICK LONG: That is the Federal Agriculture Minister and Deputy Leader of the Nationals, Bridget McKenzie, Senator Bridget McKenzie, speaking to you there.