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The National Farmers Union (NFU), NFU Cymru, NFU Scotland and Ulster Farmers’ Union have written to the government to express concern over potential changes to the new dairy contract legislation.

Following years of campaigning from farming unions and consultation with the dairy sector, the Fair Dealing Obligations (Milk) Regulations 2024 came into force in the UK on 9 July 2024. They apply to all new contracts made for the purchase of milk from a producer.

The regulations are designed to ensure fair and transparent contracts for dairy farmers and avoid abuses of power within the supply chain, preventing contract changes being imposed without agreement.

However, in a press statement, the NFU expressed its ‘alarm’ over potential changes to the legislation relating to exclusivity, and the unintended consequences of the tiered pricing provisions within the regulations.

The unions said: “Historically, contracts have allowed milk buyers to have complete discretion over the price paid for milk and exclusivity over all of the milk produced on a dairy farm”.

“A cornerstone of the new legislation was designed to sever this control over both price and volume, allowing a dairy farmer access to a non-exclusive agreement enabling them to be able to market some of their milk elsewhere when it is not desired by the primary purchaser.”

The NFU highlighted that government is proposing to change this to allow for a specific interpretation of tiered pricing, encompassing both a price bonus and a penalty linked to seasonal milk volumes. This would allow the milk buyer to discount certain litres of a farm’s milk, even where a contract is exclusive, the unions said.

“The UK farming unions have always believed that the ability for milk buyers to control both price and volumes of milk on a dairy farm should be separated,” they continued in their statement. “We cannot see any reason why anyone would object to a farmer being free to market their excess milk to a third party should their primary purchaser be discounting it.”

The unions have written to food security minister Daniel Zeichner to emphasise these points and seek a proposed solution, stating that they believe these changes would act against the best interests of dairy farmers.

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