AN announcement from the UK Government of its intention to bring forward new contractual regulations to increase fairness and transparency in the dairy supply chain, has been met with a mixed response from dairy industry bodies.

The announcement, made by the Minister of State for Food, Farming and Fisheries Mark Spencer MP follows has been described as "lip service", by one dairy farmer.

Stranraer dairy farmer, Gary Mitchell, is sceptical that the announcement carries any real weight.

Mr Mitchell said: “To be honest, it doesn't really excite me. The key fact is that the whole contract situation must be connected to a statutory instrument, and there is no mention of that here.

“Until we know for sure what the contract is legally connected to, the whole thing is really just lip service.”

He continued: “Things have been voluntary until now because it has not been legislation. Nothing in the announcement explains what it is attached to so until we know that it holds no real power. I don’t see it as a step forward, yet. We could have had this same announcement two years ago.

“We need to be mindful that this will not change dairy markets, we are very much in a global cycle of milk price.

“This is about creating a better farmer, processor, retailer relationship, and the devil will be in the detail as to how this will change that relationship.”

Following a commitment made in February 2021, the UK Government, working in collaboration with the devolved governments, has produced a statutory Code of Conduct for contracts between dairy farmers and their milk buyer, using the regulation making power in section 29 of the Agriculture Act 2020.

Regulations will provide a framework, establishing legally binding minimum standards of contractual practice, whilst providing businesses with the flexibility to adapt contracts to their individual circumstances.

NFU Scotland believes this announcement puts down a marker in terms of how the UK Agriculture Act 2020 could be used effectively to deliver fairness, certainty and equity in other supply chains.

NFUS president Martin Kennedy said: “This is a significant step forward to drive fairness and transparency into the dairy supply chain and deliver a more robust future for the dairy sector. We will study the Statutory Instrument, once published, in detail to ensure that this important legislation delivers for Scottish dairy farmers.

“For too long, dairy farmers have borne far too much of the risk in the dairy supply chain and inappropriate contract terms are often at the root of the problems. These statutory contractual changes have the potential to give greater confidence to all those producing milk as well ensuring that burden of risk associated with producing milk is shared more evenly across the whole supply chain.

“It is appropriate to pay tribute to the hard work of many within NFU Scotland in getting us to this point but would make particular mention of the efforts put in by our Milk Committee’s Milk Contracts sub-group, backed by the dedicated milk policy staff at NFU Scotland.

“For more than six years, we have been actively talking to all parts of the dairy supply chain in Scotland, UK and abroad on the introduction of a statutory code of conduct for contracts and we would like to take this opportunity to thank all the farmers and stakeholders that interacted with NFUS during the process.

“NFUS will continue to work with the other UK Unions and industry stakeholders to ensure a full examination and smooth roll out of the new statutory code which will put us on the right path to building a stronger, more resilient future for the British dairy sector. We will continue to work with the government and wider industry to not only benefit farm businesses and the supply chain, but the millions of people who value access to quality, sustainable, nutritious British milk and dairy produce.”