The UK dairy industry is split over a new EU report that seeks to tighten up contractual relations between dairy farmers and processors.

The report, published last week by the High Level Group on Milk (HLG), includes seven recommendations such as the provision for collective contractual bargaining power of producers, and the enhancement of formal written contracts made between producers and processors.

The report's findings have been welcomed by the NFU, which has for some time been campaigning for improved milk contract terms for farmers. "Importantly, and something the NFU has long called for, the HLG states that the milk price should be written into the contract and, by definition, this means a method of varying that price must also be agreed between the two parties," said Mansel Raymond, NFU Dairy Board chairman.

However, Dairy UK has warned that the report risks jeopardising UK milk contracts. "It is absolutely vital that the Commission doesn't impose retrograde measures on the UK that could actually harm our dairy industry or distort the market," said Jim Begg, director general of Dairy UK.