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NFU Stress Importance of Raw Milk Contracts

06 October 2008

UK - “Raw milk contracts are one of the most important legal documents that a dairy farmer has to sign and such a commitment shouldn’t be taken lightly,” was the strong message from NFU Milk Chairman, Gwyn Jones, during a recent visit to the Vale of Clwyd.

Speaking to local NFU Cymru members during a farm walk at Plas Meifod, Henllan near Denbigh, Gwyn Jones said, “Farmers have to protect themselves. NFU Cymru has long been calling for better contracts in the dairy industry, which offer greater clarity, transparency and stability for dairy farmers. Having proper contracts that bring certainty to the way milk prices are determined, that require proper negotiation between both parties to agree change and which, ultimately, create a fairer balance of power in the supply chain, will protect farmers from becoming the hapless victims of a clash of the titans price war.

“The Union’s priority is to empower farmers to demand changes to their contract that will reduce their vulnerability. Even in today’s industry climate, with milk in short supply, costs going through the roof, a favourable exchange rate, and the need for further price increases, retailers have demonstrated their unnerving ability to rock the stability of the industry overnight. In doing so they have demonstrated the desperate need for better contracts in the dairy industry and for those farmers who are not prepared to wait until it’s too late NFU Cymru is ready to support you.” said Gwyn Jones.

NFU Cymru has produced a guidance note specifically designed to help its members understand the content of raw milk contracts. It seeks to point out the most important provisions normally contained in a contract and how they impact on the farming business.

The Union has also developed a standard form contract to be used between milk producers and milk buyers/processors. The purpose of the contract is to give greater clarity to certain provisions commonly contained in milk contracts and more fairly balance the rights and obligations contained in raw milk contracts between dairy farmers and their milk buyers.

Gwyn Jones concluded, “Don’t underestimate contracts. It is vitally important that producers fully understand the liabilities and obligations that they compel them to undertake - they are hugely important documents.”

TheCattleSite News Desk



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