New Contract Milking Agreement

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Published on 03/03/2014
BlackmanSpargo has revised its contract milking agreement.

The new agreement contains a number of clauses which are not available under the Federated Farmers’ Contract Milking Agreement 2011.

The significant advantages to the BlackmanSpargo contract milking agreement are:
  1. The agreement recognises that many contract milkers will be forming companies or using trusts as the trading vehicle.  The BlackmanSpargo agreement recognises the risk of the death or permanent disability of the key person undertaking the farming operation and permits the owner to terminate the agreement in the event of the key person’s demise or disability.
  2. Many dairy farm owners are exposed to a breach of the resource consent as the result of the action or inaction of the contract milker or his or her employees.  The BlackmanSpargo agreement indemnifies the owner from these risks.  It also requires the contract milker to provide only limited information to the officers of the regional council and holds the contract milker responsible for the proper operation of the system used on the farm.
  3. The payment provisions have been modified to the benefit of the contract milker.  The agreement recognises that in June, July and August the contract milker has incurred costs and needs income.  The BlackmanSpargo agreement provides for the contract milker to receive a modest monthly amount during these months and then an increased amount during the high production months, with a wash-up at the end.  This innovation assists the contract milker with cash flow and reduces the stress and inconvenience to the contract milker of having to negotiate with the bank for significant financial assistance during the lean months at the beginning of the season.
  4. The right of the owner to retain money in the event of an alleged breach by the contract milker (referred to as “setoff”) has been retained.  However, this right cannot be abused and requires both parties to conciliate all disputes in order to avoid delay and high legal costs inevitably associated with arbitration.
  5. The new contract is easier to read and easier to complete and is available to any of our clients.


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