July 15, 2011


UK's NFU calls for better wages for dairy farmers



The UK's National Farmers' Union (NFU) has called for fairer contracts for dairy farmers, in light of recent figures showing the UK languishing at the bottom of the European milk-price league table.


"It's just plain wrong that British dairy farmers are paid the lowest prices in Europe. They're receiving around 4 pence (US$0.6)/litre below the EU average which is a disgrace. Something has to change," Kendall, NFU President, said.


"Volume production is finally turning a corner and, despite declining farmer numbers, average yields and efficiency are improving. UK producers want to expand their businesses, but market signals tell them to do the opposite.


"The dairy industry urgently needs fair terms and conditions of trade and that's why the NFU is backing calls for a voluntary 'code of practice'. As part of our campaign we have been lobbying MPs and dairy processors to push for the introduction of fairer contracts. We believe these will deliver negotiating strength and price transparency to dairy farmers.


"A rising population here in the UK will mean some eight million more consumers on our doorstep within the next 15 years. That should be great news but unless we can find a way for our dairy farmers to get a fair return on their investment it's difficult to see how they'll be in a position to rise to the challenge.


"We know we need to produce more and I'm pleased the Government is beginning work on a food plan that will look at how we, collectively, can do that in a sustainable way. But for dairy farmers, the really critical first step is sustainable terms of supply."


Mansel Raymond, NFU dairy board chairman said, "The position the UK milk price now occupies in the EU league table is nothing short of scandalous. The clear fact for all to see is that equitable transmission of price and margin in the supply chain is not happening.


"Farmers are anxious to invest to expand as we head to the end of milk quotas. There is simply no excuse for procrastination or failure to pass on price rises to farmers. There has never been a clearer signal that things have to change. We have identified the weaknesses in most existing milk contracts - let's work together to put things right so we can look forward to a future of growth and profitability."


As part of our 'It's time to back our dairy farmers' campaign, the NFU wants the government to introduce the following measures. Firstly, back the EU Commission's proposals to provide a new baseline standard for milk contracts that is compulsory across all milk buyers and milk deliveries.


Secondly, draw up a contractual code of practice backed up, if necessary, by regulation to ensure fair dealings between farmers and dairy companies. This could have a broader scope than the Commission's proposals and encompass a wider set of common contract clauses such as price variation, termination, exclusivity and assignment.


Thirdly, to repare standard template contracts as an example of best practice. The NFU's template contract would provide an excellent basis for this.


Fourthly, to examine whether the operation of Rural Development Programmes can be improved to assist farmer representatives by enabling the employment of professional support for negotiation.


Lastly, to investigate the possibility for producing more transparent information on the distribution of margins and wholesale prices in the dairy supply chain.

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