A clause that sought to penalise farmers for low milk supply has been removed from Brownes contracts after revision by the West Australian dairy processor.
Some dairy farmers have raised concern over the clause, which detailed that Brownes suppliers would be required to pay a fine of five cents for every litre not provided to company, if the farmer met less than 90 per cent of his or her monthly quota.
In a statement, a spokeswoman for Brownes said the contract document seen by the ABC that included the penalty for undersupplied milk, were in "draft form".
"The document which has been referred to is a very old draft which currently has no standing as it has been revised many times over," she said.
The spokeswoman said the final version of the contracts was "still some way off" and would not contain "many clauses seen in earlier drafts".
She said "no farmer had been asked to sign anything".
The ABC understands the clause to penalise farmers for low milk supply was one of those that has been removed.
But at least one farmer has disputed Brownes statement that the contract documents including a penalty clause was a draft.
Some farmers that supply Brownes have been out of contract since their existing agreements with the processor expired at the end of June.
The Brownes spokeswoman said farmers have been advised by the company they may continue to operate under their existing or expired contracts while new contracts are being finalised.
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