Dairy farmers not happy with Fonterra price plan

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Victorian dairy farmers say Fonterra’s plan to only recompense suppliers who have continued to supply the dairy processor since last year’s farmgate price crisis could breach the incoming code of conduct.

As the Australian reports, unlike the other major dairy processor Murray Goulburn which has cut its clawback loan scheme for all suppliers, Fonterra will not recompense suppliers who are now supplying other processors.

Instead, the company will pay an extra 40 cents on top of its forecast farmgate price of $5.30 to $5.70 kgms to current suppliers only.

According to the United Dairyfarmers of Victoria, this is not fair for those suppliers who have left Fonterra and may breach the new code of conduct which comes into effect on July 1.

 “Fonterra has listened to industry and is taking steps to provide a more stable commercial environment for their farmers by providing an indicative forecasting for the season’s milk price,” said UDV President Adam Jenkins in a statement.

“However, this was an opportunity to draw a line in the sand and start rebuilding trust in the industry after the milk crisis, but nothing has been done to rectify the heartache caused to many farmers who bore the burden of management decisions last year.”

Jenkins said Fonterra’s refusal to compensate farmers who switched processors for financial reasons would make the dairy industry more inequitable.

“Farmers who were financially forced to leave their processors should not be forced to continue to bear the cost of processor actions and serious questions must be answered about the fairness and equity of the treatment of those who have left through no fault of their own,” he said.

“They should be paid a fair price for the milk they delivered last year and all farmers who supplied should be paid no matter who they now supply.”

As the ABC reports, a Victorian law firm is organising a class action against Fonterra for its clawback loans, with the court process due to start in July.

David Burstyner, from Adley Burstyner, is working with Harwood Andrews on the action.

Referring to Fonterra’s latest plan, Burstyner said, “It just seems to me like a shameless attempt to once again trick farmers to continue supplying and that’s a different thing to making up for short changing them last year.”