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Fears over 'voluntary code' on milk prices

By Western Morning News  |  Posted: September 04, 2012

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Agreement on a voluntary code of best practice on contracts between milk buyers and dairy farmers has been reached.

But the landmark “voluntary code” between the processor trade body Dairy UK and the farming unions could be too little, too late – and some industry insiders fear it may not work.

Neil Parish, Conservative MP for Honiton and Tiverton and a former farmer, says that a long-term solution must be found to ensure that the angry scenes when major dairies were picketed by irate farmers – who forced a climbdown in proposed cuts in payments – are never repeated. “We shall have to look very closely at this voluntary code over time and, if it is not working, take action to ensure there is a mechanism that does,” said Mr Parish, who is a former chairman of the Agriculture Committee in the European Parliament.

“If that is the case I shall be asking the Government to bring in a mandatory code.”

Dairy UK director general Jim Begg said he was delighted with the agreement.

“This important initiative builds upon existing arrangements, which give farmers and processors security in business relationships, while adding additional safeguards that will assure farmers that their contracts are not putting them at a disadvantage in the marketplace.” He added: “The code should also enable dairy farmers and processors to build relationships of trust and mutual understanding.”

Mansel Raymond, chairman of the National Farmers’ Union (NFU) Dairy Board commented: “This code is the culmination of many months of hard work by all parties. The NFU has championed the cause of improving dairy contracts and we are now very pleased to be launching this code of best practice.

“In line with the Dairy Coalition’s 10-point plan we shall be working with farmers and processors to see the many beneficial terms of this code translated into beneficial terms in milk-supply contracts. Getting this code agreed is the right footing to move forward with the industry on a robust and ambitious strategy for the dairy sector, which is a priority for us.”

But despite the arrival of a voluntary code there remains widespread scepticism among producers.

Entrepreneur Somerset dairy farmer Derek Mead commented: “We are no nearer moving to a decent milk price than we were a month ago. Dairy farmers by the dozen are now rushing to sell up and get out of an occupation which has kept them poor for longer than they care to remember.”

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