Improving Dairy Contracts

EU - National Farmers' Union (NFU) board chairman Mansel Raymond was in Brussels last week as part of the UK delegation discussing European Commission plans to improve dairy contracts.
calendar icon 15 March 2011
clock icon 2 minute read
National Farmers Union

The Commission package follows recommendations made by the High Level Experts' Group on Milk last year, with the aim of improving contractual relations with processors and putting producers and producer organisations on a more even footing.

Mr Raymond was joined by his representatives of NFU Scotland and the Ulster Farming Union at a Copa Milk Working Group meeting where the plans were up for discussion.

He said it was high time Europe’s dairy farmers were given help to strengthen their position in the supply chain.

“The Commission’s proposal goes part of the way towards improving the situation for farmers. We already have milk contracts in the UK, but market price flexibility post-quota will be very important.

“Some form of pricing formula will be needed, especially moving forward, to allow producers to leave their contracts where buyers want to impose unrealistically low prices.”

During the meeting, representatives of ‘over-quota’ member states who are paying a super-levy had a lively debate on the ‘soft landing’. Mr Raymond was sympathetic to their producers, but did not support any buy-out scheme, or measures which could falsely inflate the price of milk quota.

The European Parliament has now drawn up its initial reaction to the Commission’s proposals in a draft report by Northern Irish MEP Jim Nicholson.

In a move supported by the NFU, his report gives dairy farmers the right to request a milk contract, complying with basic EU standards, even if their national government chooses not to enforce mandatory contracts. It also proposes that the collective bargaining power of Producer Organisations (POs) to negotiate contract terms should be limited to 20 per cent of national production – compared to the Commission proposal of 33 per cent.

The report is due to be debated in the Agriculture Committee this week and voted on by all MEPs at the plenary session in early July.

Mr Raymond is also vice-chairman of the dairy Copa working group.

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