DairyCo

EFRA backs EU contract proposals on pricing, volumes, deliveries and duration

The Environment, Food and Rural Affairs Committee (EFRA) have called for the UK Government to support proposals put forward by the European Commission to strengthen the bargaining position of dairy farmers through amendments to how contracts are designed and the establishment of Producer Organisations.

Following an in-depth review of the current state of the UK dairy industry, and the challenges and opportunities it faces in the future, the EFRA Select Committee have summarised that without Government action the sustainability of UK dairy producers will be compromised.

They recommend that the Government ensures UK dairy farmers are offered written contracts which specify either a raw milk price or the principles underpinning price, the volume and timing of deliveries and the duration of the contract. 

The Committee also recommend that the main factors which contribute to the imbalance in bargaining power be addressed to allow for the industry to take advantage of the opportunities arising from the abolition of milk quotas and growing global demand for dairy products. While the creation of Producer Organisations is broadly supported, the Committee warned that there must also be safeguards put in place to ensure competition is not distorted.

Other recommendations include calling on the Government to clarify its position on large-scale dairy farming and to provide greater support for innovative research and development aimed at increasing efficiencies and reducing production costs.

Further details on the findings of the EFRA Committee can be found on their website:

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenvfru/952/95202.htm,