Dairy Crest’s decision to slash the price paid to its farmer suppliers by 2p/litre from next week has been condemned by the NFU.
Dairy board chairman Mansel Raymond said that giving non-aligned producers just four days’ notice of such a large cut was “outrageous” and there was no excuse for paying a farmgate milk price that was 3-4p/litre below the cost of production.
NFU president Peter Kendall said he would call on farming minister Jim Paice to take action over unfair milk contracts and put an end to processors being able to exploit farmers in such a way.
“The basic component of a contract is certainty. With a 2p/litre price cut at four days’ notice, Dairy Crest has demonstrated that its contract with farmers is fundamentally a bad one.”
Mr Raymond said such a short notice period before price cuts made it difficult for any farmer to run a business and meant farmers would be forced to accept a price they had not agreed to, for at least the 12-month notice on their contract.
“This is sheer exploitation and the clearest demonstration yet that those dairy contracts, where buyers have the discretion to change price without mutual consent, must have break clauses which allow farmers to leave earlier.
“The exploitative position farmers find themselves in will continue to be used against them by milk buyers unless we see either a robust code of practice or legislation put into operation very soon.”