The UK farming unions have written to the government to raise alarm over potential changes to the new dairy contracts legislation.
The four unions have written to Food Security Minister Daniel Zeichner seeking further clarification about the Fair Dealing Obligations (Milk) Regulations 2024.
Historically, contracts have allowed milk buyers to have complete discretion over the price paid for milk and exclusivity over all of the milk produced on a dairy farm.
A cornerstone of the new legislation was designed to sever this control over both price and volume, allowing a dairy farmer access to a non-exclusive agreement.
This would enable them to be able to market some of their milk elsewhere when it is not desired by the primary purchaser.
The unions understand that the government is proposing to change this to allow for a specific interpretation of tiered pricing that encompasses both a price bonus and penalty linked to seasonal milk volumes.
However, the NFU, NFU Scotland, NFU Cymru and Ulster Farmers' Union warn that this would effectively allow the milk buyer to discount certain litres of a farm’s milk, even where a contract is exclusive.
The UK farming unions said: “[We] have always believed that the ability for milk buyers to control both price and volumes of milk on a dairy farm should be separated.
"We cannot see any reason why anyone would object to a farmer being free to market their excess milk to a third party should their primary purchaser be discounting it."
The new Fair Dealing Obligations Regulations, following consultation with the dairy sector, are designed to ensure fair and transparent contracts for all dairy farmers by stopping contract changes being imposed without agreement.
It’s understood the potential changes relate to exclusivity and the unintended consequences of the tiered pricing provisions within the regulations.
The unions continued: “We share the minister's desire to improve fairness in the dairy supply chain, but these proposed changes would act against the best interests of dairy farmers.
"That is why we have written to him seeking further clarification and a proposed solution without delay.”
