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Australian Politician Calls for Laws to Prevent Dairy 'Claw-Backs'

18 August 2016

AUSTRALIA - An Australian politician has called for greater regulation of milk pricing following problems suffered by many dairy farmers during the slump in prices.

Senator Nick Xenophon targeted the 'claw back' of money by firms such as Murray Goulburn, which refers to the situation when the company cut its milk price and applied the price reduction for milk that had already been supplied.

“Current unfair contract laws don’t appear to give protection to those dairy farmers who made decision in good faith, based on forecasts and statements by Murray Goulburn management, only to find they are in deep debt because of the ‘claw back provisions’. It is unfair and unconscionable that they are in this position,” Mr Xenophon said.

Senator Xenophon, together with Member for Mayo Rebekha Sharkie, will draft changes to the Competition and Consumer Act to give more protection for farmers hit by claw back clauses.

The call came on the same day as Murray Goulburn held a meeting with Australia's Prime Minister and Deputy Prime Minister, which was an election pledge by the recently re-elected Coalition Government.

In a letter to suppliers after the meeting, the company said it was supportive of the government's proposal to set up a Commodity Milk Price Index to improve transparency in the sector.

TheCattleSite News Desk

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