The collective bargaining group, Premium, authorised with handling negotiations with dairy processor Lactalis on behalf of its farmer members, appointed a new chairman earlier last month.
Scenic Rim dairy farmer Peter Jervis stepped down from his long-standing role as chairman of the group earlier this month and was replaced by the youngest and newest member of the board, Peter Garratt.
Peter is based on his family's dairy farm at Southbrook, half an hour out from Toowoomba. He has been on the board of Premium for over three years and is also a QDO District Councillor for the Darling Downs.
Premium was given the first authorisation to exist as a collective bargaining group charged with negotiating on behalf of its members by the ACCC in 2000, after the deregulation of the dairy industry. Membership to Premium is not compulsory, but most Lactalis Suppliers in the region choose to do so.
The relationship between Lactalis and Premium is one that in theory, seeks mutual benefit to the parties. Premium and the Lion Dairy and Drinks' equivalent bargaining group, Dairy Farmers Milk Cooperative (DFMC) which is technically still a milk supply co-op, were set up separately as mechanisms to help mitigate the impact of the distortion of power between processors and farmers in the supply chain that followed deregulation. However, the 2017 ACCC Report into the Dairy Industry argues that for the most part, this has been unsuccessful. This is not to say that the role of a collective bargaining group is not essential for many in our industry. It is hard to comprehend the state the industry would be in had these groups not been in existence given the massive decline in the number of farms in Queensland and northern NSW.
Now, the Mandatory Code of Conduct has been developed to help address that imbalance. The behaviour of some processors in fulfilling their first requirement under the code to make the details of its contracts public, has left a lot to be desired. As a result, you would expect Premium, DFMC and other collective bargaining groups across our dairying regions to have busy time ahead as they engage with their processors to finalise the details of those contracts.
It is expected that the details of the contract as publicised in June will not change greatly based on negotiations and Peter expects that the price paid to farmers will not change dramatically. At this point Premium's first goal will be to secure additional drought payments for their farmers via Woolworths' contracted private label milk and to ensure the highest realistic price is set as the base price for the contract period.
As a Lactalis supplier, former director and current member of Premium, I know first-hand, the effort involved in trying to do the best thing for farmers. Negotiations are not just about the farmgate price, but also about the penalties and bonuses and other fine details that can make or break a contract.
I wish the Premium board well in the coming negotiations and wish Peter Garratt the best in his new role and thank Peter Jervis for his time as chairman and his continued role as deputy chairman.