State’s dairy farmers unite for better deal

Dairy farmers are banding together in a bid for better pricing and contracts.

After a four-year hiatus, the WA Dairy Farmers Collective Bargaining Group has been reconvened in a bid to negotiate better prices for the State's dairy farmers.

A committee has already been selected to negotiate for Harvey Fresh suppliers and a committee for Brownes suppliers is being formed.

Capel dairy farmer Mike Norton is chairing the Collective Bargaining Group and said although there was a statewide shortage of milk, farmers weren't seeing that reflected in significantly better prices.

Instead, he said processors were attempting to shore up supplies by offering long-term, five- year contracts that in some cases could leave dairy farmers worse off.

"Production dropped off 7 to 8 per cent last year," he said.

"The existing processors are obviously getting very nervous and are trying to sign farmers up on contracts. Some of those contracts are quite onerous on the producers.

"There's nothing in those contracts that say there will be an annual review and there isn't any indication for price increases."

Mr Norton said some of the contracts included clauses that could potentially allow processors to pass costs back to the grower.

The Collective Bargaining Group not only provides a legal framework within which growers can negotiate price increases with processors, it also gives dairy farmers a more unified voice.

"With shortages of supply and a lot of very unhappy growers out there across a number of companies, farmers are in a pretty good position to negotiate," Mr Norton said.

"We'd like to get a very basic contract that hopefully all dairy farmers can use.

"The current contracts are very complicated and stacked against dairy farmers.

"That's not doing the relationship between the processors and the growers any good at all.

"It certainly doesn't give anybody any incentive to go and invest in the dairy industry and if the processors want more milk then there has to be a contract that is indicative of that."

Sam Epiro runs a herd of 250 cattle at his Harvey dairy and said having a collective gave producers a stronger voice.

Mr Epiro said dairy processors had committed themselves to long-term contracts with retailers to the detriment of the industry.

The Harvey Fresh supplier has joined the collective and said growers needed to negotiate a better price across their entire milk supply.

"If there is a shortage of milk happening now, instead of just giving us an increase across the board for our milk, (processors) are offering us growth incentives," he said.

"If we can't make money on our base income volume, this growth incentive is no help.

"As an individual to go and negotiate price with a company, it requires a lot of work effort and it's not fair on the processors if they've got all their farmers going in there individually and negotiating.

"The only commonsense thing is to get one body to represent you."

More than half of Harvey Fresh and Brownes suppliers have joined the collective and processors have been notified the bargaining group has reconvened.

Mr Norton said Harvey Fresh had shown interest in entering discussions. There is no intention as yet to organise a committee to represent National Foods suppliers.