Dairy UK and the NFU have announced what they called a “Landmark” agreement on the long-awaited voluntary code of practice.
Details of the agreement will be provided tomorrow. The announcement comes after Dairy UK and farmers said in July they had reached heads of agreement regarding the code.
Provisions agreed in principle included farmers receiving at least 30 days’ notice of price changes, an end to retrospective price adjustments and rules to let farmers supply more than one processor when their primary buyer seeks to cap their production.
“The code should enable dairy farmers and processors to build relationships of trust and mutual understanding,” said Dairy UK director general Jim Begg (pictured).
“This important initiative builds upon existing arrangements giving 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.
“Only on this basis can the industry create the added value that will protect it from price volatility. We would hope that the spirit of co-operation that has resulted in this agreement can be carried forward into the future.”
NFU dairy board chair Mansel Raymond said the code was “the culmination of many months of hard work by all parties”.
“Farmers need equitable and trusting relationships with their milk buyers and this can only be achieved by putting in place fair and transparent milk supply contracts,” Raymond said.
“We will 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.”