‘Shameful behaviour’ over milk contracts

Aug 6 2007

by Anna Lognonne, The Journal

THE Royal Association of British Dairy Farmers has called for milk contracts to be less prescriptive and more in touch with the realities of the marketplace. The Association believes that many contracts on offer to farmers contain unreasonable clauses and unworkable demands and that the lengthy contracts farmers must commit to, keeps them at a competitive disadvantage. RABDF chairman Lyndon Edwards said: “Milk contracts should be forged with a sense of realism from both parties. “On the one hand, it is unrealistic for farmers to allow themselves to be steam-rollered into signing contracts which do not fit their production system as a result of the climate of fear they are being held in. “On the other, many of the contracts on offer from processors and retailers have impracticable, unreasonable demands, and the notice periods farmers’ have to give to get out of them are ridiculously long and do not allow them to take advantage of market opportunities. Story continues ADVERTISEMENT “Despite the improvements in world dairy commodity prices, money is not currently being passed back to farmers the way it should be and farm-gate prices remain ridiculously low. “There is now no justification for this as far as we are concerned but, unfortunately, due to the lengthy contracts farmers are locked into, they are completely powerless to do anything to help themselves and remain at the mercy of their processor. “We would like to receive a straight answer from all the processors as to why farm-gate milk prices are not tracking . It is not acceptable to use milk contracts as a convenient excuse and simply pocket the benefits for themselves. “It is shameful behaviour, especially when they’re aware of the chronic financial crisis many dairy farms face.”

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