Government ministers have today (February 3), announced plans for a fairer dairy supply chain.
The UK government and Devolved Administrations have published their response to last year’s consultation seeking views from dairy farmers and processors across the UK about how contracts and relationships could be improved.
The 12-week consultation was launched in June last year by the UK government, with input from Devolved Administrations, to explore whether regulations could be introduced to ensure fair treatment across the UK’s dairy sector.
Imbalances of power within the dairy supply chain were believed to be causing instability for dairy farmers, such as milk buyers having the ability to set and modify the terms of a contract at short notice.
The responses to the consultation demonstrated the need to introduce new regulations to require certain standards for contracts between those producing and buying milk for processing.
Distinctive circumstances in Northern Ireland
The consultation also revealed that the distinctive circumstances in Northern Ireland may need to be reflected in regulations, and the government has said that this will be considered.
The UK government, working in close collaboration with the Devolved Administrations, will develop a new statutory Code of Conduct for the sector, using section 29 of the Agriculture Act 2020, to increase fairness in the supply chain and help farmers become more competitive.
Building on the evidence shared as part of the consultation, the new statutory code will seek to provide a guiding framework, establishing minimum standards but also providing businesses with the flexibility to adapt contracts to their individual circumstances.
Further engagement with industry remains necessary to develop the standards to be specified within this framework.
Department for Environment Food and Rural Affairs (DEFRA) Farming Minister, Victoria Prentis said:
It is only right that any contracts drawn up between farmers and processors deliver fair conditions across the board, for an industry that works hard year-round to provide the dairy products for which we are world-renowned.
"This new Code of Conduct will crack down on unfair practices within the supply chain, supporting the dairy sector and ensuring that our dairy farmers remain competitive as they look to the future.”