Farmers threaten to maintain milk blockade

Nigel Batten, an FFA area spokesman for West Wales, said there was no arrangement to rescind the milk price cuts which are due to come into action on August 1, and until that was done the blockades would continue.

“The blockades will last as long as it takes – into autumn if necessary,”​ he said. “We cannot survive on 25p per litre.”​

An NFU spokesman said: “We have agreed a code of practice that will make a difference down the line. However we are still looking for a reversal of the price cuts due on August 1 and we will support any peaceful legal action aimed at securing that reversal."​

At a meeting yesterday at the Royal Welsh Show in Powys, that was chaired by farming minister Jim Paice and attended by representatives of the NFU and Dairy UK, the two sides agreed a framework that will be worked up over the summer.

Code of practice​

A Dairy UK spokesman told foodmanufacture.co.uk: “We are very pleased to announce that heads of agreement have been reached on a voluntary code of practice. There is now a lot of work to be done in taking the code to the implementation stage and we are committed to doing this.”​

A spokesman for the Department for Environment, Food and Rural Affairs (DEFRA) said it was intended that the finer details of the code would be finalised by all parties by the end of August.

He added: “The code means that in future, contracts between farmers and dairy processors will be freely negotiated, fairer and more transparent. Individual farmers will negotiate contracts covering issues including pricing, notice periods and farmers will have the ability to leave contracts more easily if they are unhappy with the price they receive.”​

Paice said: “I welcome the commitment all sides have shown to reaching an agreement. The government will continue to work with all parts of the industry to secure its long-term future, including promoting farmers working together in producer organisations.”​​

He also revealed that tomorrow (Wednesday July 25), DEFRA ministers would be meeting retailers individually to talk about increasing dairy industry sustainability through greater sourcing and promotion of British dairy products.

NFU president Peter Kendall said that while the deal gave some hope for the long term, it did not solve the dairy farming issues of today.

Dysfunctional markets​

“This agreement will give us the architecture we need to make sure that we don’t end up with the same dysfunctional markets that are responsible for the dairy crisis we have today,”​ he said.

The heads of terms establish a number of minimum requirements and new provisions for dairy contracts between farmers and milk buyers.

The code stipulates that dairy farmers must receive at least 30 days’ notice of a price change and retrospective price adjustments are no longer acceptable.

The code also puts in place conditions that must be met, where a purchaser wishes to use his discretion to set farm gate milk prices.

These include a commitment to engage with farmers and their representatives, a commitment to maintain prices within mutually agreed parameters and where a farmer disagrees with a price change, the right of the producer to exit the contract with three months’ notice.

Further conditions include the ability of farmers to supply more than one processor, where their primary milk buyer seeks to cap their production and the right to automatic contractual release for producers from insolvent purchasers.