Dairy farmers will have no doubt seen that DEFRA and the Devolved Governments launched a consultation into contractual reform for the sector, writes Bryn Francis.
A review of supply chain fairness by the Grocery Code Adjudicator found an uneven distribution of power within the supply chain and views were gathered on contract regulation aimed at improving fairness.
The FUW also responded to the consultation after consulting with our branches and of course our Milk and Dairy committee.
During the COVID-19 pandemic, we heard from many members who had borne a disproportionate amount of the cost in the supply chain when markets changed overnight.
In light of this we supported contract regulation. However due to the large number of members that supply farmer owned co-operatives it was also felt that any regulations that are implemented should have the flexibility to allow those to continue to operate as they do.
We made it clear that the contract should explain clearly on what basis prices would be calculated and that any changes proposed to the method should be properly consulted on allowing a fairer balance of risk between producer and processor.
If legislation is to be introduced, it must be applied fairly and equally across all UK nations.
We also asked for force majeure clauses for TB breakdowns and adverse weather to be included where fixed volumes were part of the contract so producers are not penalised for volume changes where the circumstances are outside of their control.
Another point we highlighted is that over the years we have had instances of members being forced to agree to a new contract or face price cuts without being allowed to take advice, a producer should never be prevented from taking legal advice on contractual terms due to confidentiality clauses and these types of clauses should be prohibited.