Dairy voluntary code review can find solutions

Divisions over the dairy industry’s voluntary code can be put aside to find workable solutions, the review’s chairman has said.

Independent chairman Scottish MP Alex Fergusson said all parties wanted the code carry on, despite the outcry over a lack of level playing field from some of the biggest companies.

Since the deadline for written submissions passed on 17 April, Mr Fergusson has met individually with several interested groups and companies and is now pulling his thoughts together.

He will put his recommendations to Dairy UK, NFU and NFU Scotland at a meeting in the next month, who will then write a revised code.

See also Dairy code review should finish by August

Mr Fergusson said he was concerned it was taking a long time but there was no point rushing if all parties wanted to get the review right.

“There are clear differences of opinion that everybody knows about and the trick is to try and come up with a solution that people will find acceptable,” he said.

“The really cheering thing about the whole thing is everybody I have spoken to is keen to see the voluntary code of practice continue.

“Nobody wants to see the end of it and nobody has said they want to walk away from it.”

The sharp drops in farmgate milk prices this spring led to public debate about the effectiveness of the voluntary code, which aims to create fair contractual terms between farmers and buyers.

Dairy Crest CEO Mark Allen branded Arla’s announcements of a price cut in May with three days’ notice “unacceptable”.

Under the code, processors are asked to give farmers 30 days’ notice of discretionary price changes, but this does not apply for democratic decisions, such as in co-ops, or on formula contracts.

Muller Wiseman has previously said the co-ops’ exemption to farmers being able to leave a contract within three months of a price change was also unfair.

Trade association Dairy UK said it would not comment on the review process until it was complete but it was looking forward to Mr Fergusson’s recommendations.

The NFU has said it wants clarity, choice and certainty in contracts and it would also explore milk buyer exclusivity and how notice periods apply to co-ops.