Ensuring fairness and transparency in the UK dairy sector

The measures, part of prime minister Rishi Sunak’s commitments made at the Farm to Fork Summit earlier this year, are designed to help establish stability and accountability across the dairy supply chain.

Farmers will be able to challenge prices. In addition, contract changes being imposed on farmers without agreement will be stopped, and farmers will be able to raise concerns more easily – issues that have felt unable to deal with in recent years. The regulations are being supported by leading industry players Dairy UK and the National Farmers’ Union.

The regulations will result in the following:

• Farmers will have clearer pricing terms with contracts setting out the factors which generate the milk price, allowing farmers to challenge prices if they feel this process isn’t being followed.
• Changes to contracts can’t be imposed on farmers without their agreement. This will encourage dialogue between the parties where changes do need to be made, improving trust within the supply chain.
• Farmers’ contracts will all include a straightforward way to raise concerns about their contracts, promoting accountability and timely issue resolution.
• Clear rules will be put in place on notice periods and contractual exclusivity. This is designed to remove any ambiguity from contracts and protect the rights of both buyers and sellers.
• An enforcement mechanism has been created to guarantee the regulations are followed.

A significant step forward

Michael Oakes, NFU dairy board chair, welcomed the steps, saying they marked a significant step forward in efforts to increase fairness and transparency: “For a long time, unfair milk contracts have held British dairy businesses back, and these changes will give dairy farmers much-needed business security and confidence, as well as helping to share risk along the dairy supply chain.”

A Dairy UK spokesperson welcomed the engagement provided by Defra during the development of the regulation: “Dairy UK has always believed that this regulation should strike the right balance between greater transparency and maintaining flexibility in the industry.”

Farming minister, Mark Spencer, said: “Farmers must be paid a fair price for their produce and these regulations will provide price certainty and stability for farmers by establishing written milk purchase agreements with clear and unambiguous terms.”

He added, “This represents a key milestone in our commitment to promote fairness and transparency across food supply chains to support farmers and build a stronger future for the industry, and will be followed by reviews in the egg and horticulture sector supply chains this autumn.”