Lawyers are poring over the full and final dairy code of practice ahead of its publication.
The code could be in place this autumn after months of talks by dairy processors and farmers’ representatives to secure an agreement for a voluntary code of practice that will oversee the relationship between milk buyers and producers.
The legal experts have been examining the code to ensure it meets competition laws since Dairy UK, the NFU and NFU Scotland reached a deal in London last Friday (31 August).
The code will include a requirement for buyers to give dairy farmers at least 30 days’ notice of any changes to the farmgate milk price. Farmers will have the right to walk away from contracts by giving three months’ notice.
Dairy UK director general Jim Begg said it would take “about a week” for the code to receive legal clearance. “If we pursue this on a voluntary basis, then we can generate the level of profit necessary to get investment in the industry.”
NFU dairy chairman Mansel Raymond said milk producers should have a choice of contracts. Those who wanted security might opt for less risky contracts based on the cost of production, rather than a more volatile market-related pricing model.
In a bid to ensure early and complete adoption, implementation of the code will be monitored by the coalition of farmers’ organisations fighting for fairer milk prices, said Mr Mansel. It would be reviewed after a year.
As well as exposing non-compliance, the coalition has pledged to expose irresponsible behaviour in the milk market by developing a whistle-blower mechanism for farmers. Milk buyers should create pricing models that delivered a fair milk price, it said.