Potential changes to dairy contracts alarm UK farming unions

The NFU, NFU Scotland, NFU Cymru and the Ulster Farmers’ Union have all written to the government expressing alarm over potential changes to dairy contract legislation. Photo: Canva

Possible changes to new dairy contracts legislation have infuriated UK farm union leaders who have worked for years to provide a level playing field for dairy producers.

Four unions, namely the NFU, NFU Scotland, NFU Cymru and the Ulster Farmers’ Union, have all written to the government expressing alarm over potential changes to dairy contract legislation.

In the letter to Food Security minister Daniel Zeichner, they argue this year’s Fair Dealing Obligations (Milk) legislations could jeopardised through potential changes relating to exclusivity and the unintended consequences of the tiered pricing provisions within the regulations.

Dairy agreements

They said: “Historically, contracts have allowed milk buyers to have complete discretion over the price paid for milk and exclusivity overall of the milk produced on a dairy farm. A cornerstone of the new legislation was designed to sever this control over both price and volume, allowing a dairy farmer access to a non-exclusive agreement enabling them to be able to market some of their milk elsewhere when it is not desired by the primary purchaser.

“We understand government is proposing to change this to allow for a specific interpretation of tiered pricing that encompasses both a price bonus and penalty linked to seasonal milk volumes.”

The unions say this would effectively allow the milk buyer to discount certain litres of a farm’s milk, even when the contract is exclusive.

“The UK farming unions have always believed that the ability for milk buyers to control both price and volumes of milk on a dairy farm should be separated. We cannot see any reason why anyone would object to a farmer being free to market their excess milk to a third party should their primary purchaser be discounting it.

“We share the Food Security minister’s desire to improve fairness in the dairy supply chain, but these proposed changes would act against the best interests of dairy farmers.”

The new regulations are designed to ensure fair and transparent contracts for all dairy farmers by stopping contract changes being imposed without agreement.