Bargaining role seen for DWA

26 Jul, 2000 03:01 PM

THE new Dairy Western Australia (DWA), emerging from the ashes of the now defunct Dairy Industry Authority (DIA), could have a future role as a collective bargainer for the WA dairy industry. The idea was floated at a recent WA Farmers Federation (WAFF) dairy meeting at Boyanup where DWA transitional board members took suggestions from dairy farmers into possible roles for the new dairy farmer-owned company. A collective bargaining role for the DWA was not readily accepted by some producers, who thought such a system could damage links between dairy farmers and processors. However, others saw it as a positive move towards increasing bargaining power and helping dairy farmers who have never had to negotiate prices in a regulated environment. The system could also prevent supermarkets from putting pressure on processors to lower prices, which in turn would ease pressure on dairy farmer margins. Transitional board adviser Peter Wilkes, of law firm Clayton Utz, said, if the system was voluntary and not used with unreasonable power, it was legal. "It depends on the lessening of competition," he said. In such a scenario, processors would get all their milk through one company, such as the DWA, an unlisted share-based public company. Other possible roles put up for the DWA included promoting local milk quality, investigating growth opportunities for the industry, joint ventures with processors and increasing commerce and trade input at government level. The DWA's Claremont Showgrounds facility, inherited from the DIA, could also be used for educational purposes or for providing fee-paying dairy promotion programs for processors. The Australian Dairy Farmers Federation (ADFF) has already applied to the Australian Competition and Consumer Commission (ACCC) for farmers to form groups and negotiate contract prices with milk processors. WAFF dairy section president Danny Harris told Farm Weekly that the system, already gaining large dairy farmer support in South Africa after deregulation, could also make it easier for processors to negotiate prices. The DWA transitional board, appointed by the State Government, is chaired by Stuart Hicks and also includes Danny Harris, Eric Biddulph and Graeme Ravenhill. Mr Hicks said he understood dairy farmers did not want the $10 million of former DIA assets being used to fund wages and salaries until the money ran out. He said interest on DWA cash assets transferred from the DIA, believed to be about $6m, nearly covered wages and salaries of the new company's five staff members. Concern was expressed at the Boyanup meeting that there was already too much duplication of services within the dairy industry with amalgamation suggested. Dairy farmers should have received their Prospective Shareholding Entitlement sheet and package outlining details of the DWA and its structure last week. The assets of the DIA were transferred into the DWA on proclamation of deregulation last Friday, when the DIA also ceased to exist.


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