Dairy farmers are set to be exempt from costly inspections on their water supplies.
New regulations are due to come into force in April this year aimed at guaranteeing that the public is not at risk from consuming food or drink produced with water from private supplies.
However, the NFU has argued that as much of the water used by dairy farmers does not come into contact with the public, they should be exempt. A significant number of dairy farms will have also transferred to using their own water supply to reduce costs.
Legislation is overseen by the Food Standards Agency (FSA) and the Drinking Water Inspectorate (DWI). The NFU now understands that the FSA will be making new statutory guidance available by the end of March and the DWI has already advised local authorities on a case-by-case basis to treat dairy farmers as exempt as a result.
NFU water policy adviser Jenny Bashford said: "This is potentially good news for British dairy farmers as this would have placed an extra financial burden on the industry.
"The NFU is pleased that this decision looks certain to go ahead because much of the water used by dairy farmers does not come into contact with the public."
The NFU is also concerned that the regulations only consider water quality from the source rather than take into account its use. This means all the water from a given source needs to be tested rather than any water which could have an adverse effect on those consuming the milk or products made.
