National

Dairy code fast-tracked as inquiry begins

By AAP Newswire

Scott Morrison accepts dairy farmers are "getting done over" but is not interested in engaging with a Senate inquiry set up by Pauline Hanson.

The prime minister said the competition watchdog had already examined the dairy industry, with its investigation leading to a mandatory code of conduct taking effect early next year.

"Let's get this one (the code) in place and if we need to do more, well let's do more," Mr Morrison told 2GB radio on Friday.

Agriculture Minister Bridget McKenzie on Friday revealed the code will take effect in January, well before the original deadline of July 2020.

A draft will be released for consultation next week, which the minister expected dairy processors would keep in mind when developing new contracts with farmers over the coming months.

"The dairy industry is on notice to make sure that the contracts offered to farmers are appropriate and fair ahead of its formal introduction - the community expects no less," Senator McKenzie said in a statement.

Asked about imposing a minimum floor price on milk, Mr Morrison said he hoped the code would ensure farmers turned a profit.

"It is not a voluntary thing, it's an enforceable thing, there's a cop on the beat and failures are pursued with penalties for breaches," he said.

"It's designed to give the farmer the negotiating and market power which they clearly don't have right now, which is why they're getting done over."

Senator Hanson has won support for a parliamentary inquiry into re-regulating the dairy industry, despite pushback from the coalition.

Backed by Labor and crossbenchers, the inquiry will look at the merits of tasking the competition watchdog with a dairy investigation.

The Australian Competition and Consumer Commission will investigate how it could regulate the price of milk per litre paid by processors to dairy farmers.

The proposal mirrors Labor's pre-election policy.

Liberal frontbencher Jonathon Duniam said the industry did not support calls for re-regulation.

The inquiry will be centred on the performance and profitability of Australia's dairy industry since deregulation in 2000.

The Senate's regional affairs committee will look at the funding of Dairy Australia and its ability to act independently.

The inquiry, due to report in March next year, will also look at the code of practice and other approaches to making dairy farming viable.