Processors Force Producers Into Weak Contracts

FRANCE - Dairy contracts between producers and processors will secure producer's income, increase the competitiveness of the sector and provide more opportunities for farmers when the milk quota system is abolished in 2015, according to French Minister of Agriculture, Bruno Le Maire.
calendar icon 22 November 2011
clock icon 2 minute read

As of April 2011, contractual relationships between producers and processors was made compulsory through the Law of Modernization of Agriculture and Fisheries (LMAP). Since then private companies have submitted contract proposals to producers. However the National Milk Producers Organisation (NPFL) has said that these proposed contracts are unacceptable and unbalanced.

The President of NPFL, Henri Brichant has advised producers not to sign the contracts, which he believes offers a lower level of legal protection than producers receive now, through unwritten contractual sales of milk.

"We cannot accept that dairy farmers be subjected to such pressures to extort to the signing of a contract that permanently weakens them."

He said that 14,300 producers had received an unreasonable letter from processor Lactalis, which gives producers only one month to sign into a contract, which would then bind them to that processor for five years. Mr Brichant said that the proposals were far from the balanced contracts the government wanted.

With this in mind, Mr Brichant wrote to Minister Le Maire alerting him to the situation.

In the letter, Mr Brichant said that it is important that the government involves itself in initial negotiations between producers and producers to ensure that the LMAP finally starts up and plays its full part in rebalancing producer and processor relationships.

Responding to the letter, Minister Le Maire welcomed the willingness of private companies, co-operatives and dairy farmers to engage in discussions.

He said that thanks to efforts in France, the EU law on producer powers will change through the milk package. It will allow producers to collectively negotiate prices through non-commerical producer organisations for up to 3.5 per cent of their milk production, and one third of national output.

Minister Le Maire said that producers and processors must continue negotiations as to what what milk contracts would involve, and encouraged them to take part in the government consultation

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