Dairy advocate Derek Minus says the lack of an independent dispute resolution body, two years after the ACCC recommended it, is a glaring failure of the dairy industry body nominated to introduce it.
But farmers can still harness new powers available to them under the new dairy code, by negotiating now if they hope to gain a good agreement from their processor, when new season deals are revealed in June.
Under the new dairy code, processors must release their pricing structure all at once and producers will have more time to reflect on the offer before signing up.
There are also new rules allowing dispute resolution and Sydney barrister Derek Minus says that dairy farmers need to take advantage of these now if they want a better deal.
Mr Minus, is a former Commonwealth government mediation adviser for the franchising industry, with experience in the horticulture industry, working to resolve disputes.
Mr Minus cautions that dairy farmers will only be able to use the arbitration procedure in the Diary Code if both the farmer and the processor have a written arbitration agreement and both request it - an unlikely situation when there is a dispute.
"Step one farmers have got to talk to their processors and discuss the dispute resolution provisions to be included in the new milk supply agreement now. If you leave it until June 1, it will be too late," he says.
An imbalance of power between producers and processors was recognised in the ACCC recommendations that led to the new dairy code.
New laws that allow dispute resolution are a good thing but Mr Minus points out that the Senate Inquiry into the franchising industry recognised that an agreement to mediate is not the same as an inexpensive determination of a dispute by arbitration.
The ACCC specified that processors should include detailed dispute resolution clauses in farmer contracts that allow for binding determination or arbitration.
The commission also noted that for the avoidance of doubt, this dispute resolution process should govern disputes between processors and collective bargaining groups. The Dairy Code only provides that they may be included.
