Fight is on for fair dairy contracts

A letter sent by NFU Cymru to Welsh Members of the European Parliament (MEPs) calls for their support to end the dysfunctions of the dairy supply chain.

 

NFU Cymru has called on its Welsh MEPs to influence and shape proposals made to the European Commission by the High Level Group on Milk (HLG), which was set up by the Commission 12 months ago to examine the long-term future of the EU dairy sector ahead of abolition of quotas in 2015.

 

NFU Cymru Dairy Board Chairman Maurice Jones said, “We are pleased to see that the Commission has acknowledged that there is a significant imbalance in bargaining power between farmers and dairies and the lack of certainty and control about the price farmers receive for their milk. However we have identified some areas of concern that need addressing when it goes before the European Agricultural Committee for discussion early next month.

 

“Most significantly and something NFU Cymru has lobbied hard for is that the price is written into a contract and, by definition, this means a method of varying the price must also be agreed between the two parties. In addition, we have also suggested to the MEPs that price variation and termination clauses should be linked, and that any price variation that occurs outside an agreed formula must be agreed freely between dairies and farmer representatives, or Producer Organisations.”                                 

 

Another area of concern in the Commission’s paper is that one important clause relating to milk contracts appears to have been dropped from a previous draft version.

 

Maurice Jones continued, “The Commissioner made it clear in his announcement that producers should call for contracts to be put in place that meet the Commissions requirements, even where a member state may not make it obligatory. We’ve made it clear to the MEPs that if the UK Government fails to make written contracts a compulsory requirement in the UK, the absence of this particular clause in the Commission’s paper, could mean that our dairy farmers are left unable to negotiate better contracts for themselves and benefit from these important proposals.”

 

NFU Cymru has also highlighted to MEPs that the ability for dairy farmers to supply agreed volumes to one or more buyers would improve competition for milk and strengthen producer bargaining power.