New consultation on milk supply contracts and pricing mechanisms

Welsh dairy farmers urged to respond to consultation on dairy contracts and seize opportunity for change

NFU Cymru is urging Welsh dairy farmers to contribute their views to an important new consultation on milk supply contracts and help drive change in the sector.

The consultation to tackle supply chain issues across the UK dairy sector was launched by Welsh Government last week in conjunction with the other UK Governments. It seeks to provide new fairer conditions for milk contracts.  Farmers are encouraged to submit their views to the consultation ahead of its September 15, 2020 closure.

NFU Cymru has been working with partners at the NFU, NFU Scotland and Ulster Farmers’ Union for many years to lobby for changes to dairy contracts.

NFU Cymru Dairy Board Chair Abi Reader said: “We are pleased that Welsh Government has today issued this long-awaited consultation.

We believe it is the start of an opportunity for the sector to move forward.

“At times when the market is under pressure, milk buyers often have the discretion to change contract terms and pricing mechanisms, even to introduce retrospective penalties and price cuts without negotiation.

“The recent Covid-19 crisis has seen many of these scenarios play out. Farmers were hit with price cuts at no notice, unilateral implementation of A/B quotas, a lack of transparency over pricing and delayed payments, which left many businesses in an unsustainable position. This has to change, and with mandatory conditions within milk contracts we have an opportunity to do just that.

Let’s not waste this opportunity and work together for a positive outcome.

“Processors with a sound track record have absolutely nothing to fear from this consultation, it is all about good practice, fairness and a supply chain that works. For example, volume management is likely to be part of future contracts and processors can benefit from that.

“We will now be consulting widely with dairy members in Wales ensuring they are given the facts and an opportunity to comment.

Those views will then formulate our response to Welsh Government. I urge all dairy farmers in Wales to get involved in the consultation process and make their voice heard.”

North Wales Chronicle | Anglesey