Calls for dairy code to be strengthened

The dairy voluntary code needs to be supported by more processors and strengthened to give farmers the protection they were promised, delegates at the Semex Conference in Glasgow have heard.

The Dairy Industry Code of Best Practice for Contractual Relations, implemented in April last year, tried to improve relations between farmers and processors with measures such as the option to leave a milk contract after a price change with three months’ notice and is being reviewed by all the parties involved in drawing it up.

More than 85% of the UK milk supply is covered by the code. Co-ops are exempt from the three-month notice clause, but several smaller processors have still not signed up.

There is also concern that some processors are not adhering to all parts of the code as they should.

DEFRA secretary Owen Paterson, NFU president Peter Kendall and Dairy Crest’s group procurement director Mike Sheldon all said it was important that processors signed up to the code so farmers were protected properly.

“I really do think it is worth fighting for. There will be a change at some point – let’s not abandon the safeguards we have with the voluntary code.”
Peter Kendall, NFU president

Mr Kendall said that while this was an exciting time for the dairy industry, with a strong milk price:feed price ratio and high global demand, the code’s provisions would be essential when harder times returned.

“I really do think it is worth fighting for. There will be a change at some point – let’s not abandon the safeguards we have with the voluntary code,” he said.

“Let’s continue to see if it can evolve moving forward, that it is fit for purpose and we don’t get individual companies going off.

“I believe there will be a time when we need those provisions again.”

Dairy Crest’s Mike Sheldon said his company agreed fully with all aspects of the code and had been one of the first to sign up to it.

“The voluntary code is fantastic and absolutely the right thing to do,” he said.

“Perhaps it has not been as successful as it could have been and it does need the review that is scheduled now really, really urgently.

“I am astonished that you as farmers have allowed it to be interpreted differently and that we don’t have a level playing field on the notice period that you can give on their contract.”

Owen Paterson said that a well-supported voluntary code was an example of good collaboration between farmers and dairy companies.

“I fully support the industry’s review process – it has had a positive impact for milk producers and processors.”

(More on the Dairy Code of Practice)