Northern Isles MP welcomes new regulations for fairer dairy contracts

Orkney and Shetland MP, Alistair Carmichael, has welcomed the introduction today of new regulations which will support fairer and more transparent contracts for dairy farmers across the UK.

The NFUS and other UK farming unions have been campaigning against unfair practices and abuses of power in the dairy supply chain for over a decade. The government held an industry-wide consultation in 2020, which found that unfair practices within the supply chain were linked to buyers having the power to set and modify the terms of a contract with no negotiation with the producer and little notification.

The new regulations will aim to improve transparency and accountability across the dairy supply chain by stopping contract changes being imposed without agreement. There will also be a system in place to enable farmers to verify the calculation of variable prices. The regulations also include an enforcement regime, backed up with government powers to impose substantial financial penalties in respect of any breaches.

Mr Carmichael said:

“The regulations introduced today are welcome news for dairy farmers across the country. Fairer and more transparent rules for the dairy supply chain will directly help local producers, and support the viability of the wider industry. I give credit to the NFUS and the other farming unions for their tireless campaigning which has paid off today.

“We all know how vital local dairy production is, not just for our economy but for security of supply and long-term resilience. It is not something that we can take for granted.

“Actions now – if the results live up to the intentions – will be welcome but this has been a long time coming. Shetland is down to two dairy farms at this point and the numbers in Orkney have been declining as well. Maintaining the presence and viability of the dairy farms is critical and that will require a recognition by the supermarkets that they pay an economic rate. The problems of supermarkets abusing their dominant position are not restricted to the dairy sector but cut across every sector in Scottish agriculture.

“Dairy farmers in the isles have worked hard to establish a brand recognised as being a high-quality product. The least we should expect is for buyers to pay a fair price for it.”