“The Fair Dealings Obligations (Milk) Regulations 2024 applies to all new contracts relating to the purchase of milk from dairy farmers. The new regulations aim to establish transparency and accountability across the dairy supply chain, and will prohibit contract changes being implemented without prior agreement.”
The Upper Bann MP added: ”Farming unions have been calling out unfair practices in the dairy supply chain for over a decade. The new regulations announced on 9th July, represent a significant milestone for dairy farmers across Great Britain and Northern Ireland.
“Contracts are critical in any business relationship and the new regulations ensure a level playing field for milk producers and processors. Confidence and trust in the supply chain is vital for long-term business planning and future goals.”
In 2018 an industry-wide review of the Groceries Code Adjudicator, highlighted an uneven distribution of power within the dairy sector. This led DEFRA to launch a consultation on contract regulation in 2020. The consultation received a comprehensive response from dairy farmers and UK farming unions in favour of improving fairness in the dairy supply chain.
Ms Lockhart continued: ”The new legislation is positive news for dairy farmers. There is a 12-month transition period for existing agreements, but as of 9th July any new contract offered to a producer must be compliant with the new regulations.
“Fairer contracts will provide a framework and outline legally binding minimum standards. Farm-gate milk prices remain volatile and until now, processors have been able to change pricing and introduce penalties without prior warning or negotiation.
“Mandatory contracts create a fair and transparent environment for farmers and processors. The new regulations will prompt the supply chain to address and revise some of its major issues, leading to a better future for the dairy industry.”
Carla Lockhart added: “Farmers will have more confidence in their business. The regulations will also help to safeguard the supply chain which provides quality, nutritious and sustainable locally-produced milk and dairy produce to consumers.
“Contracts must have a 21-day cooling off period and outline clear terms relating to milk purchasing, pricing and payment structures, dispute resolution and the length and process of termination.
“Farmers can challenge contracts by consulting an independent third party, or obtain additional advice from the Agricultural Supply Chain Adjudicator guidance published on www.gov.uk.
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