‘Final push’ to agree dairy code of practice

Dairy industry leaders are meeting for a final big push in the hope of agreeing a code of practice that will mean fairer milk prices for farmers.

Farmers’ representatives and dairy processors will convene for talks in London on Friday (31 August). They will try to thrash out a deal so an official announcement can be made at next week’s Livestock 2012 event in Birmingham.

Farm minister Jim Paice is due to make the opening address at Livestock 2012 on Tuesday (4 September). If a deal is reached, an announcement on the voluntary code of practice will be included in his keynote speech.

Sticking points continue to be the finer detail surrounding the principles for a code agreed at last month’s Royal Welsh Show. “Both sides believe a deal is possible,” said a source close to the negotiations. “But there are still some loose ends to be tied up.”

If agreed, the full code of practice will cover the terms and conditions under which contracts between processors and farmers can be negotiated. It will also cover the terms under which a farmer can terminate a supply, including notice periods, when prices change.

Earlier, Robert Wiseman Dairies pledged to rebuild trust with farmers via a new mechanism that would determine how much it pays producers for milk. The “Wisemilk Initiative” would use the proposed code as a framework, it said.

How the mechanism would work remains unclear. But Wiseman said it would focus on finding a transparent way of determining farmgate milk prices so farmers could plan more effectively, within the context of a free and fair market.

“We have to strengthen the basis of the partnership we have with dairy farmers,” acknowledged Pete Nicholson, Wiseman milk procurement director. “There is a shared belief that steps can be taken to remove the tensions and lack of clarity that exist in the supply chain.”

Pressure has been mounting steadily for a further reversal of milk price cuts since protests by farmers forced processors to abandon reductions planned for 1 August. But no major milk firm has so far announced plans to reinstate milk prices to levels last paid on 1 May.

NFU dairy board chairman Mansel Raymond said signs of improvement in the global market would justify price increases. “Prices cuts made in May and June are still hurting; farmers need to see that money back into their businesses now.”

Johann Tasker on G+

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