Farmers, processors reach agreement

 

The framework between farmers and processors has been brokered by Defra farming minister Jim Paice during meetings held at the Royal Welsh Show.

 

NFU Cymru Deputy President Stephen James said, “Today’s announcement gave some hope for the long term but it did not solve the dairy farming issues of today. This agreement will give us the architecture we need to make sure that we don’t end up with the same dysfunctional markets that are responsible for the dairy crisis we have today.”

 

NFU, NFUS and the dairy processors organisation Dairy UK agreed to heads of terms for a Dairy Industry code of best practice on contractual relations during today’s meeting at the NFU Cymru Headquarters, Builth Wells. The heads of terms establish a number of minimum requirements and new provisions for dairy contracts between farmers and milk buyers.

 

The code stipulates that dairy farmers must receive at least 30 days’ notice of a price change and retrospective price adjustments are no longer acceptable.

 

The code also puts in place conditions that must be met, where a purchaser wishes to use their discretion to set farm gate milk prices, these include a commitment to engage with farmers and their representatives, a commitment to maintain prices within mutually agreed parameters and where a farmer disagrees with a price change, the right of the producer to exit the contract with three months’ notice.

 

Further conditions include the ability of farmers to supply more than one processor, where their primary milk buyer seeks to cap their production and the right to automatic contractual release for producers from insolvent purchasers.