A group of British politicians has called on the government to consider legislation to bind contracts between dairy farmers and processors if the current Voluntary Code of Best Practice on Contractual Relationships fails to meet its objectives.
In a report published earlier today, the House of Commons Welsh Affairs Committee said that the code should be “given a chance to work.”
But if “tangible improvements” in the current situation are not forthcoming, the British government must also be prepared to develop legislation.
The Code of Best Practice was drawn up by the National Farmers Union (NFU), NFU Scotland, and Dairy UK in September 2012 following months of demonstrations by dairy farmers protesting against planned milk price reductions.
The Code was designed to provide dairy farmers with assurances that their contracts are not putting them at a disadvantage in the marketplace.
According to the report, an estimated 85% of British milk was bound by the principles of the code as of March 2013. Arla Foods UK, Muller UK, Dairy Crest, and First Milk are among a long list of dairy processors to have so-far adopted the code.
Government must legislate if code fails
“The events of the summer of 2012 brought to public attention the difficulties faced by dairy farmers, particularly their powerlessness in the face of severe price reductions announced with little warning,” said the report.
“Our short inquiry has shown that most within the industry welcome the voluntary code and want to give it time to work. But many also believe it would be right for government to legislate if the code does not lead to tangible improvements.”
The report called on all dairy processors “who have not yet signed the voluntary code to do so" and recommends that should the Voluntary Code of Best Practice on Contractual Relationships fail, “the UK Government must legislate for a statutory code of contract in the dairy industry.”
Voluntary Code “the best option”
Commenting on the report, chair of the Welsh Affairs Committee, David Davies MP, said that adherence to the voluntary code is “the best option.”
“To give it the best chance to be effective, we urge all dairy processors who have not yet signed the voluntary code to do so,” said Davies.
“We hope that this report will maintain pressure on the industry to ensure the voluntary code is a success and provides a fairer deal for our dairy farmers. However, if it does not work, Government should stand ready to ensure that fairer deal through a mandatory code,” he added.