UK Farm Unions Raise Concerns Over Proposed Changes to Dairy Contracts
Source: DairyNews.today
The UK’s leading farming unions have voiced their concerns to the government regarding potential amendments to the upcoming Fair Dealing Obligations (Milk) Regulations 2024, which could impact the dairy sector. In a joint letter to Food Security Minister Daniel Zeichner, the National Farmers' Union (NFU), NFU Scotland, NFU Cymru, and the Ulster Farmers’ Union have called for further clarification on key provisions in the legislation.
Historically, dairy contracts have given milk buyers significant control, with the ability to set milk prices and demand exclusivity over all milk produced on a farm. A central aim of the new legislation was to break this control, allowing dairy farmers more flexibility to negotiate non-exclusive agreements, giving them the ability to sell excess milk to third parties when it is not required by the primary buyer.
However, the unions are concerned that the government is considering changes to the original proposal, which would introduce a tiered pricing model. This system would tie bonuses or penalties to seasonal milk volumes, potentially allowing buyers to apply discounts to certain quantities of milk, even in exclusive contracts.
In a statement, the unions expressed their frustration: "We 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."
The Fair Dealing Obligations Regulations are intended to ensure fairer and more transparent contracts for dairy farmers, preventing unilateral contract changes. However, the unions fear that the tiered pricing model could undermine these goals, limiting the benefits of the proposed non-exclusive agreements.
The unions emphasized their support for the government’s efforts to improve fairness in the dairy supply chain but urged for a swift resolution. “We share the minister's desire to improve fairness in the dairy supply chain, but these proposed changes would act against the best interests of dairy farmers. That is why we have written to him seeking further clarification and a proposed solution without delay.”
As the industry awaits further government guidance, the potential revisions to the legislation could have significant implications for dairy farmers' ability to negotiate fair contracts and market their products.
However, the unions are concerned that the government is considering changes to the original proposal, which would introduce a tiered pricing model. This system would tie bonuses or penalties to seasonal milk volumes, potentially allowing buyers to apply discounts to certain quantities of milk, even in exclusive contracts.
In a statement, the unions expressed their frustration: "We 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."
The Fair Dealing Obligations Regulations are intended to ensure fairer and more transparent contracts for dairy farmers, preventing unilateral contract changes. However, the unions fear that the tiered pricing model could undermine these goals, limiting the benefits of the proposed non-exclusive agreements.
The unions emphasized their support for the government’s efforts to improve fairness in the dairy supply chain but urged for a swift resolution. “We share the minister's desire to improve fairness in the dairy supply chain, but these proposed changes would act against the best interests of dairy farmers. That is why we have written to him seeking further clarification and a proposed solution without delay.”
As the industry awaits further government guidance, the potential revisions to the legislation could have significant implications for dairy farmers' ability to negotiate fair contracts and market their products.
