NFU 2010: One in three unhappy with dairy contracts


Almost a third of dairy farmers are not satisfied with their milk contracts, according to the NFU following a survey of producers.


Carried out by the union in a bid to encourage farmers to get to grips with their contracts, the dairy health check survey found 29% of respondents were unhappy with their contracts.


Of the 177 farmers questioned across the country between November last year and the end of January, 56% said they were “fairly satisfied” with the agreement they had signed with their processor.


Robert Wiseman Dairies came out on top as the processor with the most satisfied suppliers. Twenty-one per cent said they were satisfied with their contracts and 71% were “fairly satisfied”.


Of the five listed processors, First Milk fared the least well, with half of its suppliers claiming to be unhappy with the terms they had signed (see table, below).


NFU chief dairy adviser Hayley Campbell-Gibbons said the health check showed farmers wanted one clear schedule for schedules and specifications and more certainty on how milk prices are formulated.


Producers also wanted clarity on sampling procedures, clarification of contract terms and equal termination rights for both parties.


Speaking to delegates at a dairy breakout session at the NFU conference in Birmingham on Tuesday (23 February), Ms Campbell-Gibbons said milk producers found dairy contracts “dry and complicated”, but the results showed more discussion needed to be held over ways to improve supply agreements.


“No matter if it’s a cooperative or a plc, there’s a massive desire and potential to change for both parties,” Ms Campbell-Gibbons said.


“There are issues here that can be built upon. There could be a code of practice and legislation [surrounding contracts]. Quotas are going, so contracts have to change to go with that.


“Then industry needs to embrace change and seize the opportunities that are offered.”





































How the processors fare among suppliers (%)


Dairy


Satisfied


Fairly Satisfied


Not satisfied


Wiseman


21.4


71.4


7.1


Dairy Crest


9.1


63.6


27.3


Arla


9.7


54.8


35.5


Milk Link


0


56.3


37.5


First Milk


7.1


40.5


50




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* Where figures do not total 100% respondents did not pick an option