Expand links In this section

Dairy Australia - Empowering farmers to bargain factsheet

​​​​​​​​Department of Agriculture and Water Resources, April 2016

These case studies share examples of existing farmer collaboration​

Download

Document

Pages

File size

Dairy Australia - Empowering farmers to bargain factsheet PDF

2

2.2 MB

If you have difficulty accessing this file, visit web accessibility for assistance.

Online version

Key points

  • Dairy Australia’s Collective Bargaining for Dairy Farmers is a practical guide for producers who want to negotiate directly with processors, retailers and customers.
  • The guide provides information on starting a collective bargaining group, including options, legal requirements and the pros and cons.
  • Collective bargaining requires a high level of commitment, specialist advice and negotiation skills.
  • Collective bargaining can lead to farmers and companies receiving better deals and all parties feeling more ownership.
  • For further information visit agriculture.gov.au/cooperatives

Dairy Australia’s how-to guide, Collective Bargaining for Dairy Farmers, helps to level the playing field for producers who want to negotiate directly with processors, retailers and other potential customers.

It covers whether and how to start a collective bargaining group (CBG), for which dairy farmers would need authorisation from the Australian Competition and Consumer Commission (ACCC).

Dairy Australia, the industry’s national services body, published the user-friendly guide in 2014 in response to demand from dairy farmers in Queensland, northern New South Wales and Victoria.

Claire Miller, Manager, Policy Strategy at Dairy Australia, oversaw the project. She says that in 2011 and 2012, dairy industry conditions and events converged in ways that escalated interest in collective bargaining.

‘A lot of long-standing contracts in Queensland and northern New South Wales were coming up for re-negotiation and farmers were concerned about the prices being offered by milk companies,’ she says. ‘There was also a drought and the general market conditions at the time were not favourable for the farmer.

‘And at that time, Coles started selling milk for $1 a litre, and Woolworths matched them, creating a perception that this was one of the factors driving down farm gate milk prices.

‘Farmers felt disadvantaged when it came to negotiating. Before the ACCC’s Collective Bargaining Agreement authorisations were introduced, farmers couldn’t negotiate directly with the supermarkets and they felt they were being picked off one by one,’ she says. ‘Understanding collective bargaining better was one way they could feel more in control of their situation.

It’s like any business proposition. You need to do your homework and get good advice, if you can find it.

Where collective bargaining has worked, farmers and companies have got a better deal and all parties feel more ownership.

‘That’s why we decided to develop a useful tool in the form of a practical guide that could take them through what is involved, the legal requirements, the pluses and the pitfalls, to help them decide whether to take it on. Because collective bargaining is much more complicated than people think.’

It demands a high level of commitment in time and finance. ‘It’s like any business proposition. You need to do your homework and get good advice, if you can find it.’ Lack of specialist advice was one of the issues identified in researching the guide. ‘There are not many specialists in collective bargaining for agriculture. For example, dairy farmers need their legal advisor to know what bargaining points they could bring to the table. It’s not necessarily just about price.’

The guide also highlighted the need to provide training in negotiation skills for dairy farmers, for which the NSW Farmers Association has since run workshops.

The guide generated positive feedback and demand for copies but dairy farmers have not rushed into forming CBGs. Claire says this was not the guide’s objective, nor a measure of its success. ‘It helped a lot of people to clarify their thinking about their options,’ she says. ‘Farmers tend to be incredibly individual. They are not instinctively inclined towards collectivism and they may read it and decide this is much more complicated than they expected.

‘And it is part of a process of empowering farmers if they embark on collective bargaining. Where collective bargaining has worked, farmers and companies have got a better deal and all parties feel more ownership.’

To download a copy of the guide visit www.dairyaustralia.com.au

These case studies were compiled by RIRDC to share examples of existing farmer collaboration.

​​​