Clearer contracts will secure milk supply Tom Hind NFU chief dairy adviser Sir; Your article, 'Contract proposals a threat to milk supply' (The Grocer, 24 November, p54), wrongly states that the model contract prepared by the NFU and NFU Scotland would allow farmers to set prices for a fixed period of time. This is not the case. The contract is about stimulating debate between producers and processors at a time of unprecedented change in the milk market. If supply arrangements are to be sustainable and secure, a contract must strike a balance between the interests of the buyer and seller. To suggest that a template for fairer contracts could destabilise supply is a strangely defensive approach in a market where supply is already unstable, partly as a result of the lack of balanced, fair contracts in which both parties can place some trust. World demand for dairy products is increasing, while climate change is making production more volatile. Therefore, market dynamics are changing and supply risks are increasing. Retailers and milk buyers are becoming more conscious of securing supply and finding ways to mitigate volatility in commodity markets. At the same time, farmers have become more business focused and are making long-term production decisions based on forward projections for different markets. A major principle enshrined in the NFU dairy contract is clarity over the parties' volume requirements, milk price, variation processes and testing regimes. The greater the clarity in contracts, the more likely that farmers will have the confidence to produce milk over the longer term, thereby providing security of supply. Thankfully, some forward-looking milk purchasers recognise contracts need to change. The NFU and NFUS look forward to working with them.