Guarantee minimum terms in EU dairy contracts – NFU

EU Dairy Package regulations voted through the European Parliament today are positive but don’t go far enough, the NFU has said.

The amended text to the Dairy Package does not guarantee minimum terms in contracts across the European Single Market.

This was despite being recognised by the European Higher Level Group of experts as an important step for delivering a better functioning market place for milk and dairy products in the EU.

Mansel Raymond, NFU dairy board chairman and Copa-Cogeca milk committee vice chairman, said: “The text of the Dairy Package establishes clear and sensible rules for price determination in milk contracts for farmers supplying a dairy other than a co-op. However, these explicit provisions for minimum terms in contracts are left to member states to choose to implement.

“In the UK we know farmers are adversely affected by poor contracts. As an example, it’s quite common for a contract to have 12 or more months’ notice requirement to leave, yet the price the farmer is paid can be changed at will by the processor without notice.

“This isn’t a contract it’s exploitation. The commission package establishes rules to address this and we believe no farmer in the UK should be subjected to this type of commercial relationship in the future.

“In the UK, Defra is favouring a voluntary approach to dairy contracts, via a code of practice. The NFU is fully engaged in this process, but the status quo of combining long notice periods with complete buyer’s discretion, with no option for farmers to leave the contract earlier if agreement on price change is not met, is an important line in the sand for the NFU and its members.

“If the voluntary code doesn’t deliver a more balanced distribution of risk and reward, it is important Defra steps up and implements this legislation in the UK.

“The NFU will be working with interested members in the coming months to establish levels of interests and specific rules for Producer Organisations. This is one output of the package available to farmers across the EU, and we believe it could deliver greater strength in negotiations for farmers.