Tuesday, 12 November 2019
Questions without Notice
My question is to the Minister for Agriculture, Senator McKenzie. In a deal with One Nation, the minister has finally released the draft dairy code of conduct for consultation. Key elements of the draft code have changed since January, including watering down the express prohibition of retrospective price drops for dairy farmers. Why has the minister watered down the draft code released by the former minister, David Littleproud?
I thank the senator for his question. The Nationals have stood up for our farming families and communities for 100 years and we unashamedly want to see a prosperous and sustainable dairy industry going forward. That means opening up markets, fighting on competition policies and decreasing regulation for our farmers.
At the election, there were two plans for the dairy industry put forward. One was the Labor Party's position to reregulate the dairy industry. The other was a suite of initiatives that went to the heart of the issues, which, for one, were going to put in a mandatory code of conduct to regulate the relationships between processors and farmers to make sure farmers get a fair deal after they'd been suffering from egregious behaviour from processors for many years and to make sure we put downward pressure on energy prices for our farmers, because it is one of the high input costs. So we have—
The minister is allowed to be directly relevant to the preamble as well. At this point, I do consider the minister to be directly relevant. The minister doesn't have to accept the premise of a question. I'm listening carefully. I call Senator McKenzie to continue.
I absolutely categorically reject the suggestion that there is a watering down of the treatment of processors and the relationship between farmers and processors with the code. I'm happy to go through, for the senator, the process our government has undertaken since the ACCC report recommended that we have a mandatory dairy code.
In April 2018, on the back of Murray Goulburn and Fonterra clawbacks and step-downs, the ACCC released a recommendation that we implement a mandatory dairy code, which we agreed to do. In October 2018, we announced the first round of consultation with industry, and this was the very first opportunity for a dairy industry that is quite fractured to come together around what measures they could agree on that could be part of a mandatory code. In January 2019, a set of draft clauses for the code was released, and a second round of consultation was commenced.
I'm going through the process. So we get the consultation in January around the draft clauses. It develops nine principles that go to a raft of issues around how the parties treat each other, requiring an annual set date and the processors to publicly release standard-form agreements and prohibiting prospective step-downs unless in specific circumstances, such as force majeure—
Just to clarify: it was not all changes in the code. There was a very specific wording change, which was referenced in the primary. That was the issue that the minister was pressed on this morning on AM.
I was coming to that. The question specifically went to that specified change in the code and which stakeholder asked the minister to change it. I'm going to decree that, if the minister is speaking about that specific change in the code, I do consider that to be directly relevant. I'm listening very carefully. The minister has 36 seconds remaining to answer that specific point.
Thank you for the opportunity. As I was saying, the principle that was consulted on—which goes directly to your question, Senator—was to prohibit prospective step-downs unless in specific circumstances such as force majeure, exceptional market circumstances or major changes in global market circumstances. Those principles were sent off to the office of the drafters, and what came back was that we must not vary the agreement unilaterally for any reason other than—
Senator Wong, as I said, I think, in my view, as long as the minister is talking about—
Honourable senators interjecting—
I will rule when there's silence. As long as the minister is addressing the specific change in the question, about that part of the code, I think the minister is being directly relevant. I can't direct her how to answer a question, but she must be specific to that specific change and the very specific nature of that question. I believe, at the point that point of order was raised, the minister was talking about that specific change. Senator McKenzie.
Following the release of the draft code, Nationals member for Lyne Dr Gillespie warned that it dudded farmers and refused to rule out a leadership tilt over the issue. Why is the minister siding with big producers instead of protecting dairy farmers?
Mr President, thank you very, very much. Senator, you don't actually understand what the National Party's advocacy, in this area, has been for years. It is in competition policy. It is actually addressing the issues of the dairy industry, which are high energy prices and high fodder costs. They've increased by 50 per cent, thanks to the drought. If you are a dairy farmer in areas that require irrigation, water has increased over 300 per cent in the pricing. So the input costs for our dairy farmers make it incredibly difficult for them to get the margins that they need, which is why our government took a suite of initiatives to the election. One is the mandatory dairy code of conduct to regulate that unconscionable behaviour by some of the processors. It recognises that we've got very unique regions, across Australia, when it comes to dairy. What works in northern Queensland is not going to work in WA and is not going to work in South Australia, and we need a code for all. (Time expired)