Dairy Crest Direct launches UK's first DPO

DCD represents 1,050 farms from across England and South Wales, who collectively supply 1.5 billion litres of milk each year.

The new status follows a recommendation from a Westminster report into the dairy crisis in January suggesting farmers take a stronger position in the supply chain by forming POs – legally constituted groups of producers.

Through an exemption from usual competition law, the PO can negotiate milk contracts or prices on behalf of its members.

The provision to establish DPO's was passed into law by the EU Parliament and Council in December 2013. Dairy Crest Direct used Defra's Dairy Fund to help understand the benefits of accessing this status and their application was approved by the RPA earlier this year.

Over the next few weeks, Dairy Crest Direct members have been invited to attend regional meetings where they will be able to sign up to the new agreements.

The group says the move will mean that decisions on future pricing and contract options will be by negotiation and not, as present, by discretion.

Farming Minister George Eustice said: "We want a competitive and resilient dairy industry which is why I congratulate Dairy Crest Direct on forming the first Dairy Producer Organisation in the UK. Working together and supported by a £110,000 grant from Defra's Dairy Fund, the farmers within Dairy Crest Direct will have greater power to negotiate the price of their milk and give themselves more clout in the market place."

"I encourage other dairy farmers to look at this model.”

NFU comment

Rob Harrison, NFU dairy board chairman added: “I’d also like to congratulate Dairy Crest Direct for their success in becoming the UK’s first dairy producer organisation. Let this be a sign to others in the industry that it’s vital to have strong producer representation in the dairy sector – something that our dairy farmers crucially need, especially in times of market downturn such as now.

“DCD will from July legally be able to collectively negotiate on milk price and contract terms on behalf of all it’s 1,050 members, and this follows success on a number of positive initiatives including developing both formulaic and future pricing based contracts. Now we need farmers across the UK to recognize the strength they can achieve through being part of a DPO, and crucially we need milk buyers to recognise and work with DPOs once they are established”