UK Farming Unions Raise Alarm Over Proposed Changes to Dairy Contract Legislation
Source: DairyNews.today
The National Farmers Union (NFU), along with NFU Cymru, NFU Scotland, and the Ulster Farmers’ Union, have expressed serious concerns regarding potential amendments to the Fair Dealing Obligations (Milk) Regulations 2024, which came into force in the UK on July 9, 2024.
These regulations, aimed at ensuring fairness and transparency in dairy contracts, were introduced following years of campaigning by farming unions and extensive consultation with the dairy sector.
The regulations were designed to prevent abuses of power within the dairy supply chain by requiring mutual agreement for any contract changes and ensuring that dairy farmers were not bound by restrictive terms. One of the key provisions was the ability for farmers to enter into non-exclusive agreements, allowing them to market excess milk to other buyers if their primary purchaser did not require it.
However, the farming unions have raised concerns about potential changes that could undermine these protections. Specifically, they are alarmed by the government’s proposal to introduce tiered pricing mechanisms, which would allow milk buyers to apply both bonuses and penalties based on seasonal milk volumes. The unions argue that this could effectively enable buyers to discount certain volumes of milk, even under exclusive contracts, thereby reducing farmers' ability to market their milk freely.
In a joint statement, the unions said: "Historically, contracts have given milk buyers complete discretion over the price paid for milk and exclusivity over all the milk produced on a farm. The new legislation was designed to sever this control over both price and volume, allowing farmers greater flexibility."
The unions have written to Food Security Minister Daniel Zeichner, urging him to reconsider these changes, which they believe would be detrimental to dairy farmers. "We cannot see any reason why a farmer should not be free to market their excess milk to a third party if their primary purchaser is discounting it," the statement added.
As the industry awaits further clarification from the government, the unions continue to advocate for legislation that will protect dairy farmers from unfair practices and ensure a balanced and competitive marketplace.
The regulations were designed to prevent abuses of power within the dairy supply chain by requiring mutual agreement for any contract changes and ensuring that dairy farmers were not bound by restrictive terms. One of the key provisions was the ability for farmers to enter into non-exclusive agreements, allowing them to market excess milk to other buyers if their primary purchaser did not require it.
However, the farming unions have raised concerns about potential changes that could undermine these protections. Specifically, they are alarmed by the government’s proposal to introduce tiered pricing mechanisms, which would allow milk buyers to apply both bonuses and penalties based on seasonal milk volumes. The unions argue that this could effectively enable buyers to discount certain volumes of milk, even under exclusive contracts, thereby reducing farmers' ability to market their milk freely.
In a joint statement, the unions said: "Historically, contracts have given milk buyers complete discretion over the price paid for milk and exclusivity over all the milk produced on a farm. The new legislation was designed to sever this control over both price and volume, allowing farmers greater flexibility."
The unions have written to Food Security Minister Daniel Zeichner, urging him to reconsider these changes, which they believe would be detrimental to dairy farmers. "We cannot see any reason why a farmer should not be free to market their excess milk to a third party if their primary purchaser is discounting it," the statement added.
As the industry awaits further clarification from the government, the unions continue to advocate for legislation that will protect dairy farmers from unfair practices and ensure a balanced and competitive marketplace.
