15 March 2002

NFU fair deal grain contract

THE NFU is to launch its own grain contract to help growers achieve a fair deal from the trade, but merchants warn it may do the opposite.

The new contracts will be in direct competition with the industry standard UKASTA contracts.

NFU president, Ben Gill, announced the initiative earlier this week. "Unless those who use UK grain recognise that current prices are unsustainable, they will see an exodus from British cereal production," he warned.

He confirmed the grain trade had not been consulted, apart from farmer-owned grain co-ops.

"We do not want to repeat the trades mistake of abusing its position," he said. "But some of the terms under which grain is traded is an insult and is unbearable."

Mr Gill said previous attempts to change the UKASTA contract had proved unsuccessful, forcing the NFU to introduce its own version. But UKASTA general secretary, Jeremy Smith, denied this.

"We have never introduced a revised version of our contract without consulting the NFU," said Mr Smith. "Many of the changes have been at its behest."

Mr Smith said he had not seen the details of the proposals, but was expecting to be consulted.

NFU chief arable adviser, Paul Ibbott, confirmed that he would be looking to the trade for "helpful suggestions" before the model is launched, in about six weeks.

One of the changes the contract will seek to introduce is a contract quality premium as well a deduction. But Glencores Robert Kerr indicated that such a move could backfire.

"If the trade has to deliver premiums for above-spec grain, the starting price would just have to be lower, and there would be extra admin costs. I do not think the NFU has quite grasped who the customer is." &#42

Charles Skelton, of Skelton Farms, Thorpe Arnold, Melton Mowbray, Leics, loads 27t of Consort wheat on to a lorry destined for a nearby mill. The grain was sold on contract to Grainfarmers. This week the NFU announced that it is launching a model contract for arable farmers, which it hopes will get them a better deal.