The contract, which covers the 2005, 2006 and 2007 seasons, will enable the company to offer growers a minimum price per tonne, allowing them to produce the crop confident of known returns.
Centaur's marketing manager, Richard Jenner, said: "The acreage of oats produced in the UK has declined dramatically in recent years as a result of prices having fallen back to approximately £60 per tonne.
"Plantings for the 2004 harvest in England amounted to 85,000 hectares which represented a fall of eight per cent on 2003, while the figure of 112,000 hectares for the whole of Great Britain represented a decline of six per cent.
"The Single Payment Scheme poses a further major threat to production and the future of oat production appears increasingly precarious in the UK."
Mr Jenner said if production was to be maintained, the price which growers received had to more accurately reflect the cost of production and leave them with a margin, otherwise they would simply elect not to grow the crop.
"Fulfilling the requirements of domestic consumers will therefore increasingly depend on being able to offer attractive production contracts, which is why this announcement represents an important step forward in securing the crop's future," he added.
"European Oat Millers recognise the benefit of sourcing supplies from committed growers through Centaur Grain.
"That, in turn, enables us to offer producers a range of integrated contracts and access to a guaranteed minimum price.
"We believe this will be an attractive option for growers who wish to produce the crop and hope they will sign for the entire term, as is the case with our existing contracts to supply Coors Brewers with malting barley and Warburtons with Hereward milling wheat."
The contract with European Oat Millers specifies white oats from registered growers, a minimum bushel weight of 50 kg/hl and maximum moisture, screenings and admixture levels of 14.5 per cent, 10 per cent and two per cent respectively.
Producers will have the choice of entering harvest, autumn, spring or summer pools and receive a minimum price ranging from £65 to £75 per tonne, depending on timing. They will also be able to elect to receive a fixed price of £70 per tonne ex-farm, with a £1 per month carry.
In addition to its contract with European Oat Millers, Centaur Grain is able to offer growers a contract with Morning Foods for the 2006 and 2007 harvests which utilises the same price structure and is looking to develop similar long-term contracts with other consumers of oats.

robert.benson@ypn.co.uk