The government has outlined a raft of measures to improve supply contracts in the dairy sector following concerns that farmers were not being paid a fair price.
The new regulations are set to come into force later this year, with an aim to ensure supply contracts in the dairy sector are fair and transparent.
The rule changes will enable farmers to challenge prices, stop contract changes being imposed without agreement, and ensure farmers are able to more easily raise concerns.
The development of the regulations has been supported by discussion with key industry players including the NFU and Dairy UK.
Farming Minister Mark Spencer said: "These regulations will provide price certainty and stability for farmers by establishing written milk purchase agreements with clear and unambiguous terms.
"This represents a key milestone in our commitment to promote fairness and transparency across food supply chains to support farmers."
The regulations will mean that farmers have clearer pricing terms, with contracts setting out the factors which generate the milk price and allowing farmers to challenge prices if they feel this process isn’t being followed.
Changes to contracts will mean they cannot be imposed on farmers without their agreement. This will encourage dialogue between the parties where changes do need to be made – improving trust within the supply chain.
And farmers’ contracts will include a straightforward way to raise concerns about their contracts, promoting accountability and timely issue resolution.
NFU dairy board chair Michael Oakes said: "These new regulations mark a significant step forward in the government’s efforts to increase fairness and transparency in the dairy supply chain.
"For a long time, unfair milk contracts have held British dairy businesses back, and these changes will give dairy farmers much needed business security and confidence, as well as helping to share risk along the dairy supply chain."
The upcoming dairy regulations are part of a series of supply chain interventions confirmed by the government at the Farm to Fork Summit.
New reviews will also begin this autumn to help establish fairer supply chains in the eggs and horticulture sectors.
What is included in the new dairy regulations?
The regulations will mean:
• Farmers have clearer pricing terms, with contracts setting out the factors which generate the milk price and allowing farmers to challenge prices if they feel this process isn’t being followed.
• Changes to contracts can’t be imposed on farmers without their agreement. This will encourage dialogue between the parties where changes do need to be made – improving trust within the supply chain.
• Farmers’ contracts will include a straightforward way to raise concerns about their contracts, promoting accountability and timely issue resolution.
• There will be clear rules put in place on notice periods and contractual exclusivity, protecting the rights of both buyers and sellers.
• An enforcement mechanism is created to guarantee the regulations are followed, ensuring a fully fair and transparent dairy industry on a solid foundation to thrive in the future.
