Farm leaders have called on dairy processors and retailers to implement a code of practice that will oversee the relationship between milk producers and buyers.
After being agreed last month, the dairy industry voluntary code of best practice on contractual relationships was finally published on Wednesday (3 October). The eight-page document was signed by the NFU, NFU Scotland and Dairy UK.
Buyers who sign up to the code will agree to give farmers 30 days’ notice of price changes or other contractual terms. Farmers will be able to exercise a right to terminate the contract on the 30 days’ notice if they disagree with the change.
The effectiveness of the code will be reviewed after 12 months. This will assess its efficacy in delivering better contracts. DEFRA will have access to the outcome of this review, when considering the need to implement the EU Commission package legislation on dairy contracts.
NFU dairy board chairman Mansel Raymond said: “Farmers need equitable and trusting relationships with their milk buyers and this can only be achieved by putting in place fair and transparent milk supply contracts.”
Dairy UK director general Jim Begg said the code would help give farmers and processors security in business relationships, while adding additional safeguards that would assure farmers that their contracts were not putting them at a disadvantage in the marketplace.
“The code should also enable dairy farmers and processors to build relationships of trust and mutual understanding,” said Mr Begg. “Only on this basis can the industry create the added value that will protect it from price volatility.”
George Dunn, chief executive of the Tenant Farmers Association, said: “We now look to all dairy processors and retailers to implement its terms without delay so we can begin to build a better environment for all to do business within the dairy supply chain.”Johann Tasker on G+