Rebalance of risk in NI dairy sector needed as DEFRA consults on dairy contracts

Wednesday, 24 June, 2020

The Ulster Farmers’ Union (UFU) says an equitable relationship between farmers and processors is essential within the Northern Ireland (NI) dairy industry. The Department of Environment, Food and Rural Affairs’ (DEFRA) consultation on milk contracts that was released today, exposed an uneven distribution of risk within the dairy supply chain showing farmers paid the price for risks taken within the marketplace.

The Grocery Code Adjudicator identified the issue of power inequality within their review of the dairy sector and this DEFRA consultation which has been two years in the making.

Speaking after the launch of the DEFRA consultation, UFU dairy chairman Mervyn Gordon said, “During the coronavirus crisis, NI dairy farmers have borne a disproportionate amount of the cost in the supply chain as the risks taken within the marketplace were passed down to farm level at an a rapid pace, with a series of instant cuts to farmgate milk prices. This is a direct consequence of discretionary pricing and this consultation offers the industry a once-in-a-generation opportunity to look at how milk is priced in Northern Ireland.”

The pricing mechanism is a key part of the DEFRA consultation and this will dovetail with the existing work the UFU have been carrying out on milk solids and this will form part of the Union’s response to the consultation.

“We’ve been working with the three farming unions in Great Britain and we encourage everyone in the dairy sector to get involved in this consultation. It gives us the chance to work together and build towards a better future for our dairy industry. This opportunity will not come around again for a very lengthy period, so it is vital that we avail of it.

“In a post-Brexit world, Northern Ireland dairy farmers need a more sustainable future and dairy contracts are at the heart of this. Specifically, we want to see a contract which delivers fairness for farmers and has an equitable balancing of risk between farmers and processors,” said Mr Gordon.