The UK government has detailed new regulations, slated to come into effect later this year, ensuring supply contracts in the dairy sector are “fair and transparent,” with farmers being paid reasonably for their produce. 

Delivering on a key commitment set out at the Farm to Fork Summit earlier this year, the regulations will help establish stability and accountability across the dairy supply chain by enabling farmers to challenge prices, stopping contract changes from being imposed on farmers without an agreement and ensuring farmers can more easily raise concerns.

Forthcoming review into egg sector 
The development of the regulations has been supported by detailed discussions with key industry players, including the NFU and Dairy UK, and the government has listened to feedback from farmers and processors to ensure the new regulations address previous concerns and provide tailored support for those in the industry.

“Farmers must be paid a fair price for their produce and these regulations will provide price certainty and stability for farmers by establishing written milk purchase agreements with clear and unambiguous terms,” explains farming minister Mark Spencer.

“This represents a key milestone in our commitment to promote fairness and transparency across food supply chains to support farmers and build a stronger future for the industry and will be followed by reviews into the egg and horticulture sector supply chains this autumn.”

The regulations will mean farmers have clearer pricing terms, with contracts setting out the factors that generate the milk price and allowing farmers to challenge prices if they feel this process isn’t followed. 

The UK government deems this a “significant advance in transparency,” which it anticipates will ensure fairer pricing and addresses historical discrepancies in the dairy industry.

Under the new policy, changes to contracts can’t be imposed on farmers without their agreement. “This will encourage dialogue between the parties wher changes need to be made – improving trust within the supply chain,” maintains UK leadership.

“Additionally, farmers’ contracts will all include a straightforward way to raise concerns about their contracts, promoting accountability and timely issue resolution.”

There will also be “clear rules” on notice periods and contractual exclusivity, protecting the rights of both buyers and sellers. This is done to “remove any ambiguity” from contracts and “defend the rights of buyers and sellers.”

Supply chain interventions 
The upcoming dairy regulations are part of a series of supply chain interventions confirmed by the government at the Farm to Fork Summit. 

New reviews will also begin later this year to establish fairer supply chains in the eggs and horticulture sectors. The government also announced in April that it would be developing regulations to improve relationships in the UK pig supply chain.

These regulations have been developed using new powers under the Agriculture Act 2020. 

NFU dairy board chair Michael Oakes says the latest regulations mark a significant step forward in the government’s efforts to increase fairness and transparency in the dairy supply chain.

“For a long time, unfair milk contracts have held British dairy businesses back, and these changes will give dairy farmers much-needed business security and confidence, as well as helping to share risk along the dairy supply chain.”

Oakes also believes this announcement signals that “we are on the right path to building a stronger, more resilient future for the British dairy sector.”

“We will continue to work with the government and wider industry to benefit not only farm businesses and the supply chain but the millions of people who value access to quality, sustainable and nutritious British milk.”

Meanwhile, a Dairy UK spokesperson adds: “Dairy UK has always believed that this regulation should strike the right balance between greater transparency and maintaining the flexibility the industry needs to compete in a volatile and increasingly competitive marketplace.”

“The regulations form part of the government’s wider strategy to grow a thriving British food and drink sector which will put more British produce on supermarket shelves in the UK and worldwide.”

Further boosts for UK farming 
The move comes alongside broader support for the UK agricultural sector, with £2.4 billion (US$3.1 billion) per year being invested in farming for the rest of the current Parliament’s term. 

This includes support for farmers through its new environmental land management schemes, with an expanded and improved Sustainable Farming Incentive 2023, as well as enabling new opportunities for the development of automatic and robotic technologies on farms as part of a £270 million (US$349 million) Farming Innovation Programme.