Model contract aims to make egg sector fairer for producers
© Torsten Kruger/ImageBroker/REX/Shutterstock A new “model contract” for free-range egg farmers that aims to balance their relationship with packers has been agreed.
The document, which is free to members of the British Free Range Egg Producers’ Association (Bfrepa),was launched at the organisation’s AGM this week.
It has been more than 10 months in the making and aims to help farmers negotiate contracts with their packers.
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Robert Gooch, Bfrepa chief executive, said some contracts between producers and their packers are “not worth the paper they are written on”.
Birketts LLP, a firm of solicitors engaged to draft the model contract, also stated that many agreements it reviewed were “very one-sided in favour of the packer”.
Pricing, payment terms and termination clauses were weighted entirely towards packers in some cases.
It is common for contracts to offer a minimum “breaking price” for second-class eggs, but no guaranteed price for grade A eggs.
Variable contracts option
Bfrepa advocates contracts that link the price farmers are paid for eggs to the cost of poultry feed – their biggest input.
Previous drafts of the document said farmers should either negotiate a fixed annual price for their eggs or a feed-linked contract.
However, the final version includes the option of variable egg contracts with a base price that allows packers to adjust egg cheques based on prevailing market conditions.
It also suggests including a clause that requires packers to release a producer’s Lion code number “as soon as reasonably practicable”, amid concerns about delays when a farmer wishes to sell eggs elsewhere.
“We’re not involved in the contractual discussions, but we have had a lot of calls – I have a call once a month – with a member who is very distressed about the contract they have,” Mr Gooch said.
He hopes the new document can act as a framework for negotiations with packers to improve matters and said it can be adapted to individual circumstances.