The NFU and NFU Scotland have launched a model milk contract
designed to bring greater fairness to the relationships between
milk producers and purchasers and to stimulate debate on a number
of important issues.
The document sets out a flexible template for the terms and conditions
that the two unions believe should be contained in milk contracts
and it is hoped it will promote discussion and
lead to positive changes that will benefit the whole sector.
Gwyn Jones, NFU dairy board chairman, said: "There has been
some genuine progress in milk contracts in the last few years,
stimulated by the NFU Vision for the Dairy Industry and the Milk
Development Council's excellent report on contracts in 2005.
“But these are not grounds for complacency. We still see
problems from a producer perspective in milk contracts, especially
an inherent unfairness in key commercial issues such as milk price
determination. And with the dangers of more market volatility going
forward and the probable ending of milk quotas in 2015, it is right
that we now examine the future of
The NFU/NFUS Milk Contract contains a number of important debating
- Whether there may be value for some producers in rolling
term and fixed volume contracts that may allow producers to supply
more than one buyer
- The fixing of milk price and price setting
in the contract with variation processes that encourage proper
- Clarity on milk testing regimes, especially for antibiotics
- The extent of liabilities on the part of producers and their
Willie Lamont, NFU Scotland Milk Committee Chairman, said:
“This is not about instability, settling old scores, or
encouraging farmers to get out of contract. On the contrary, we
and the vast majority of dairy farmers want to see long-term relationships,
more vertical integration, and responsible supply chains. But we
all want to see fairer relationships that build trust and confidence.
"We are offering a number of suggestions and potential solutions
to some tricky issues but we really want to encourage debate and
action from both farmers and purchasers that leads to positive
change, setting the industry up for the long-term.”
A copy of the contract is available on request.
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