4Simplified outline of this instrument

4 Simplified outline of this instrument

Part 2 prescribes a mandatory industry code in relation to processors purchasing milk from farmers.

Under the Code:

(a) processors and farmers must deal with each other in good faith (see section 11); and

(b) processors must publish standard forms of milk supply agreements on or before each 1 June (see section 12); and

(c) processors must only purchase milk under milk supply agreements that are in writing (or recorded in writing) and that comply with the requirements of the Code (see Subdivisions C and D of Division 2 of Part 2); and

(d) retrospective step downs are completely prohibited and unilateral prospective step downs are permitted only in certain exceptional circumstances (see sections 27, 28 and 39); and

(e) processors may unilaterally vary milk supply agreements only to the extent necessary to comply with a change in the law (see section 33); and

(f) complaints and disputes arising under or in connection with a milk supply agreement may be dealt with and resolved in accordance with the complaint handling procedure provided in the agreement or by mediation or arbitration (see Subdivision F of Division 2 of Part 2).

The Code, other than the obligation to deal in good faith, does not apply to processors that are small business entities (see section 8).

Note: Part VIIA of the Act empowers the Commission to monitor prices in those markets where, in the view of the Minister, competitive pressures are not sufficient to achieve efficient prices and protect consumers.