More than a decade on from the NFU’s SoS Dairy Campaign, and the UK farming unions first calling out unfair practices and abuses of power in the dairy supply chain, new legislation being laid in Parliament this week will ensure fair and transparent contracts for all dairy farmers in the UK.

The government held an industry-wide consultation in 2020 which found unfair practices within the supply chain linked to buyers having the power to set and modify the terms of a contract with no negotiation with the producer and little notification.

The new regulations will establish transparency and accountability across the dairy supply chain by stopping contract changes from being imposed without agreement.

There will also be a system in place to enable farmers to verify the calculation of variable prices. The regulations also include an enforcement regime, backed up by the ability of the Secretary of State to impose substantial financial penalties in respect of any breaches.

NFU Scotland milk committee chair Bruce Mackie said: “NFUS and the other farming unions have been pushing for contract reform since 2011 and welcome the bringing forward of legislation to regulate dairy contracts. This has been a key ask of the industry for many years. There will be a long road ahead and statutory contract legislation on its own will not solve all our problems.

“However, for too long, dairy farmers have had very little influence or power with regards to the terms under which they sell their milk, but they now have an opportunity to come together and make the most of what this legislation offers by way of strengthening their hand.”

NFU dairy board chair Michael Oakes said: “It became clear to us back in 2012 that the voluntary code of practice still left many dairy farmers open to unfair practices and abuses of power, so today marks a significant step in a long road of campaigning by the NFU and the other farming unions to improve fairness across the supply chain.

“For a long time, unfair milk contracts have held back many UK dairy businesses, and these changes will help give dairy farmers much needed business security and confidence.”

Ulster Farmers Union dairy chair Kenny Hawkes said: “The new regulations will go a long way to enhancing the position of the primary producer by establishing a legally binding, minimum standards of contractual practice, while also providing businesses with much needed certainty in terms of their supply agreement with processors.”

NFU Cymru dairy board chair Jonathan Wilkinson said: “The additional transparency and accountability introduced by these regulations will benefit the whole supply chain and provides additional certainty to farmers as to the terms under which they sell their milk.”