Monday, 2 December 2019
Questions without Notice
My question is to Minister for Agriculture, Senator McKenzie. I refer the minister to her letter that she wrote to Senator Hanson on 16 October 2019 about when the dairy code of conduct would commence. Can the minister confirm that she made a commitment to Senator Hanson that she is planning to implement the dairy code of conduct by December this year? When will the dairy code of conduct actually come into effect?
Thank you very much for your question, Senator. It's great to hear the Labor Party concerned about ensuring the sustainability of the dairy industry here in Australia—5,200 dairy farmers, who we have stood with from day one. It was our government that set up the ACCC inquiry on the back of the clawbacks that Murray Goulburn and Fonterra instigated. It was us that got the ACCC to do a very detailed inquiry into the industry. It is that inquiry's recommendations to implement a draft mandatory code that we're actually delivering. We took that policy to the federal election, along with $22 million worth of other support for our dairy farmers. We didn't put in a floor price to the people—
I'm conscious of the lengthy ruling you gave us earlier on direct relevance, but whilst there were two preceding paragraphs, the question was, 'When will the code come into effect?' We'd ask the minister to be directly relevant to that.
On the point of order, I have allowed, when I have made rulings on direct relevance, for ministers to provide some context, but I remind the minister of the question. There were two questions there, plus the reference, and you've reminded the minister of the second bit, but I remind the minister of that.
I don't need any reminding. We're keen to get that mandatory draft code of conduct that we promised at the election in place as soon as possible. To that end, we have consulted on an exposure draft with the dairy industry over the past four weeks. We are keen on making sure we restore the bargaining power to dairy farmers when they are in contract negotiations with processors.
The mandatory code of conduct, everyone in this chamber will be rapt to hear, is on track to be in place by 1 January 2020. Rather than a watered-down code, this code will improve contractual arrangements between dairy farmers and their processors, help rebalance the bargaining power and improve the transparency of transactions. The code was a key recommendation, as I said, of the ACCC report. We had done consultations prior to the federal election; we've consulted on the exposure draft post-election. We are now working with the industry to ensure that this is a code that actually delivers for each of the eight very unique dairy industries. As I've said, what works in WA or Queensland, won't work in Tasmania. (Time expired)
I refer the minister to reports that Senator McDonald has written to Coles and Woolworths chief executives, as well as major milk processors, urging them to sign up to the proposed code of conduct and commit to paying fairer milk prices immediately. Are the minister's own backbenchers now simply bypassing her because they know how ineffective the minister actually is?
Thank you very much for the question. It gives me an opportunity to talk about the great work of Senator McDonald in supporting dairy farmers, not just in Queensland but right around the country. This is in the face of Labor's failed policy perspective that is supported by Senator Hanson against the wishes of the majority of dairy farmers, and that's for a floor price, which would actually decimate dairies' ability to bargain and receive a fair price.
What we're interested in on this side of the parliament is a fair price for our dairy farmers, not a floor price. That's exactly what Susan McDonald is championing. And it's exactly right. The supermarkets have to be held to account. You can't walk out into the public sphere and say, 'The drought's going to drive up meat prices; the drought's going to drive up horticulture costs for consumers,' and then fail to enter into negotiations with processors that would see the impact of the drought, of high water and high fodder costs, on our dairy farmers. Actually, you say that consumers are going to have to pay more for their milk— (Time expired)
Can the minister confirm that the dairy code of conduct does not cover major supermarkets, such as Coles and Woolworths? Did Senator McDonald seek advice from the minister prior to writing to Coles and Woolworths executives, as well as major milk processors?
Yes; I was just going to say we'll walk you through the supply chain. When it comes to getting a bottle of milk on the shelves of supermarkets in this country, the farmer produces the milk, the processor comes and picks it up, pays a price for that, processes it and then has a relationship with the retailer. It is that particular relationship, between the processor and the retailer, that is governed by the Food and Grocery Code of Conduct. What we are seeking to do is actually implement a code—a mandatory code, not a voluntary one—that will govern the relationship between the producer and the processor, because it is a relationship that is mired in a lack of transparency, that sees farmers paid different prices around the country and played off against each other. We're seeking to have a code that will deliver a fair price from the processors to producer. We also want supermarkets to step up and pay the processor a fair price for their milk.