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Time to Redress the Balance in the Dairy Supply Chain

01 May 2012
National Farmers Union

WALES, UK - Pembrokeshire National Farmers Union (NFU) Cymru members highlighted the need for a fairer balance in the dairy supply chain during a well-attended meeting of local dairy farmers at Ludchurch Farm, Narberth courtesy of the Davies family.

Speaking at the meeting, NFU Milk Board Chairman Mansel Raymond said, “Milk supply contracts are heavily weighted in favour of milk buyers and there is a dire need for a fundamental change to the terms and conditions of trade between dairy farmers and their milk buyers. We need to see a shift away from milk buyers having the unilateral discretion to make fundamental changes to the terms of business, such as price and pricing schedules, without any meaningful consultation with milk producers.

“All we are asking for are fair and equitable contracts where the risks and rewards are shared more equally between milk producers and milk buyers. Defra Minister Jim Paice has challenged the industry to agree a voluntary code of contractual best practice and the NFU has accepted this challenge. However, if the dairy industry cannot find a way to agree on a voluntary code which is balanced and transparent, we will not shy away from calling for firm Government intervention to ensure that our dairy farmers get a fair deal,” Mr Raymond added.

William Lawrence, Pembrokeshire NFU County Milk Chairman said: “Lengthy notice periods combined with the total discretion for milk buyers to set the price they pay for the milk we produce has been the status quo for far too long. As dairy farmers we should not be in the position where we have to accept price cuts that we have not agreed to without also having the break clauses in place which would allow for the early termination of contracts.

“There is currently much demand for dairy products in both domestic and global markets and, with a growing population both in the UK and globally, I have no doubt that this level of demand will continue. However, with production costs remaining high, the prospects of our dairy farmers expanding their production to meet this demand depends on them being confident of operating in a stable market where they get a fair price for their product,” Mr Lawrence added.

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