“We must develop a collaborative dairy industry that can compete effectively in the UK and on the world markets.”
That’s the view of NFU dairy board chairman Michael Oakes, who today renewed his call for new dairy Producer Organisations after the release of an EU Commission report into the impact of the 2009 Milk Package.
The focus of the report is the important role POs can play in increasing farmer bargaining power. It echoes NFU lobbying calls for fairer, more balanced milk contracts and stronger producer representation.
The report reveals that in some EU countries, which have fully adopted the measures within the package, dairy farmers’ position in the supply chain has been improved.
In 2009 the NFU, NFU Scotland and DairyUK agreed a voluntary code of conduct on contractual relationships as a preferred route to the type of regulation Defra was contemplating at the time.
The voluntary approach has led to some improvements, but not a wholesale change of behaviour from milk buyers and many farmers continue to be treated unfairly, with contract terms changed with little or no notice and verbal assurances offered by milk buyers but then withdrawn.
Mr Oakes said: “The thrust of the EU Commission report is on the role of dairy Producer Organisations. This is something the NFU has always promoted and encouraged. It’s a shame that many UK milk buyers, both large and small, see POs as a threat and have publically said that they will not work with farmers who are part of a PO.
“Today in the dairy farming sector, collaboration is the key and the NFU sees POs as a vital part of developing new relationships in the UK dairy sector.
“While this report concludes that the EU milk package must continue post 2020, I would urge our government to read the report carefully and ensure that many of the recommendations are implemented here to the benefit of UK dairy farmers. It would be extremely unfair if the Commission supports EU farmers to collaborate and increase their bargaining power in the supply chain but the same support isn’t offered here in the UK.
“I was encouraged to hear farming minister George Eustice supporting the NFU’s approach during Defra questions in the House of Commons today, saying that he was reviewing the option of bringing the voluntary code under the remit of the Grocery Code Adjudicator and also promoting role of POs.”