Blog: Paul Tompkins on dairy contracts

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Dairy board vice chairman Paul Tompkins comments on the current dairy contracts debate and sets out some of the key messages from the NFU dairy board.

He writes: 

While briefing a local Labour MP on the Agriculture Bill I was reminded of the now immortalised phrase, ‘we have more in common than divides us’. And with the rhetoric being ramped up on dairy contracts, the sentiment behind the phrase has never been more pertinent. It is clear to me that the dairy industry is best served when we are all pulling in the same direction, however, the prolonged wait for the launch of Defra''s consultation on dairy contracts has allowed room for uncertainty and misconceptions to proliferate.

As yet we are still unclear as to what the consultation will cover, whether it will propose regulation based on the EU Milk Package (CMO) or use powers set out in the Agricultural Bill aimed at ensuring fair dealing obligations for first purchasers. As the NFU, we are not fixed to either scenario so long as the proposal works for the UK dairy sector is flexible and corrects the imbalance of power within the supply chain.

For too long, dairy farmers have shouldered much of the risk in the dairy market and in many cases have been subject to unfair contract terms and trading practices. Regulation provides the opportunity to correct some of these practices and create a level playing field in the way farmers are treated. We wish to create a UK dairy market that is fit for purpose, commercially focused and competitive.

This is not about price setting by the Government or others and it is important that processors continue to have flexibility when it comes to pricing mechanisms. However, we need to see transparent pricing to foster trust and ensure a professional, two-way relationship between farmers and suppliers. It is vital that this applies to the whole industry. The NFU dairy board is completely supportive of cooperatives structures, but as a board we do not see the need for exemptions when it comes to improving fair dealing terms for producers.

As we wait for the Government’s consultation on dairy contracts to be issued, we are using this time to consult with our members extensively. We want to understand your views and experiences on dairy contracts and our final response will be reflective of this. As always, the contact details for your dairy board and your local NFU office are available for members to see online and use. Once the official consultation has finally launched, we will be taking further steps to ensure all members have the opportunity to make their voice heard.

Last edited on: 28:11:2018

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