Concerns raised over potential changes to dairy contract legislation
18th October 2024
The UK farming unions have written to food security minister Daniel Zeichner to raise concerns over possible changes to the new dairy contract legislation, which may act against the best interests of dairy farmers.
The Fair Dealing Obligations (Milk) Regulations 2024 have only recently come into force. More than a decade on from the SoS Dairy Campaign and after years of intense campaigning from the UK farming unions calling out unfair practices and abuses of power in the dairy supply chain, these regulations introduce hard won safeguards.
The new regulations, following full consultation with the dairy sector, are designed to ensure fair and transparent contracts for all dairy farmers by stopping contract changes being imposed without agreement.
It is understood the potential changes relate to exclusivity and the unintended consequences of the tiered pricing provisions within the regulations.
READ MORE: New milk contract regulations come into force later this year
READ MORE: ‘Significant step’: Long-awaited dairy contract legislation introduced
Against best interests of dairy farmers
The UK farming unions said that historically, contracts have allowed milk buyers to have complete discretion over the price paid for milk and exclusivity over all of the milk produced on a dairy farm.
Their spokesperson added: “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 – this would effectively allow the milk buyer to discount certain litres of a farm’s milk, even where a contract is exclusive.”
UK farming unions added that they 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. That is why we have written to him seeking further clarification and a proposed solution without delay,” they concluded.
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