Regulations aimed at giving dairy farmers more bargaining power do not go far enough to help producers get fairer milk prices, according to the NFU.
The European Parliament passed its long-awaited EU Dairy Package on Wednesday (15 February) to give farmers' organisations power to negotiate raw milk prices.
It hopes the rules will allow farmers to strengthen their position in the supply chain, particularly in countries where co-operatives do not exist.
But the NFU said the Dairy Package did not do enough for producers because it did not guarantee minimum terms in milk contracts.
It said minimum terms across the European Single Market was an important step for creating a better-functioning dairy industry.
"In the UK we know farmers are adversely affected by poor contracts," said Mansel Raymond, NFU dairy board chairman.
"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."
While DEFRA has said it favours a voluntary approach to contracts via a code of practice, Mr Raymond said it was important the government stepped in and legislated if conditions did not improve.
The Dairy Package, which needs to be formally endorsed by the European Council before it will become legislation, will apply until the end of June 2020.