Farmers furious over milk contracts

The National Farmers’ Union (NFU) wants to eliminate unfair commercial practices in the dairy supply chain and is calling on members to help lend political support to the battle.

NFU dairy board chairman Mansel Raymond said: “I want to make this quite clear – the dairy market in this country is not working, which means that dairy farmers are losing out. The British dairy industry should possess many advantages, ranging from growing demand to efficient milk producers and a good climate for producing milk. Yet the industry lurches from crisis to crisis and has suffered over a decade of under-investment and low profitability.

“For dairy farmers like me, undoubtedly the biggest problem is the one-sided milk contracts that we are obliged to sign with our milk buyers. These contracts offer little to no certainty or clarity on the way milk prices are calculated; they lock dairy farmers in for long notice periods of up to 18 months, provide no ability to supply milk to any other buyer, and have no exit clauses to get out of a contract if the price drops to an unsustainable level.”

Mr Raymond referenced recent comments from within the European Commission regarding relationships between milk producers and purchasers and a recent package of measures, which include improvements to milk contracts.

“There are some exciting proposals on the table which would strengthen dairy farmers’ position in the food chain and introduce new minimum standards for milk contracts across the EU,” he said.

“It is vital that farmers call on their MPs and dairy companies to take action now to eliminate unfair commercial practices and improve milk contracts. A ‘do nothing’ approach will see dairy farmers continue to be deprived of their fair share of profits in the food chain. This will lead to under-investment, lower milk production and will mean that dairy farmers continue to leave industry at an alarming rate.”