New regulations to promote fairness and transparency for dairy sector

THE GOVERNMENT has outlined more detail on regulations set to come into force later this year which it says will ensure supply contracts in the dairy sector are fair and transparent, with farmers being paid a fair price for their produce.

Delivering on a key commitment set out at the prime minister’s Farm to Fork Summit earlier this year, the regulations will help establish stability and accountability across the dairy supply chain by enabling farmers to challenge prices, stopping contract changes being imposed on them without agreement, and ensuring they are able to more easily raise concerns.

The development of the regulations was supported by detailed discussions with key industry players, including the NFU and Dairy UK. In providing more detail, the government says that it has listened to feedback from farmers and processors to ensure the new regulations address previous concerns and provide tailored support for those in the industry.

Farming minister, Mark Spencer, said: “Farmers must be paid a fair price for their produce and 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 and build a stronger future for the industry, and will be followed by reviews into the egg and horticulture sector supply chains this autumn.”

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. The government believes that this will be a major advance in transparency, which ensures fairer pricing and addresses historical discrepancies in the dairy industry.

● Changes to contracts can’t be imposed on farmers without their agreement, which should encourage dialogue between parties where changes do need to be made – helping to improve trust within the supply chain.

● Farmers’ contracts will include a straightforward way to raise concerns about their contracts, promoting accountability and timely issue resolution.

● Clear rules will be put in place on notice periods and contractual exclusivity, protecting the rights of both buyers and sellers. This aims to remove any ambiguity from contracts and protect the rights of both buyers and sellers.

● An enforcement mechanism will be created to guarantee the regulations are followed, which should ensure that a fully fair and transparent dairy industry is built on a solid foundation to thrive in the future.

The upcoming dairy regulations are part of a series of supply chain interventions that were confirmed by the government at the Farm to Fork Summit. New reviews will also begin this autumn designed to help establish fairer supply chains in the eggs and horticulture sectors.

The government also announced in April that it will develop regulations to improve relationships in the UK pig supply chain.

The regulations were developed under the Agriculture Act 2020.

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.

“This announcement signals that we are on the right path to building a stronger, more resilient future for the British dairy sector. We will continue to work with the government and wider industry to not only benefit farm businesses and the supply chain, but the millions of people who value access to quality, sustainable, nutritious British milk.”

The regulations form part of the government’s wider strategy to grow a thriving British food and drink sector designed to put more British produce on supermarket shelves in the UK and around the world.