Dairy offers top milk price - but not to all
Dairy farmers in the Westcountry could benefit from a new deal, as giant co-op Arla Foods is launching the first milk-supply contract fully compliant with all aspects of the Dairy Industry Voluntary Code of Best Practice on Contractual Relationships.
Arla, based in Denmark, took over the Westcountry-based farmer co-op Milk Link last year, after Milk Link members voted almost unanimously for the merger.
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But they were disappointed when they found they were tied into the level of payments made to existing European suppliers. And the new deal is currently only open to new suppliers. The 2,100 Milk Link farmers, most of them in the Westcountry, will have to wait until next month for negotiations to see how they can join the scheme.
The new Arla Direct contract features liquid and compositional variations, a volume bonus for larger producers, seasonality options, and a 12-month notice period with the three-month trigger as specified in the Code.
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The Code emerged last summer after widespread and high-profile complaints that farmers were losing money with every drop of milk produced, because contracts could be changed by the large dairies at very short notice. The action campaign, led by the newly created Dairy Coalition, included picketing of factories and a mass rally in London.
The new contract has been launched as part of Arla’s recruitment drive to secure an additional 500 million litres of milk in the UK and is being offered at a standard litre price of 30.02ppl – just over the generally accepted industry target figure.
Ash Amirahmadi, Arla’s head of milk and member services, said: “We believe this contract offers dairy farmers, who are not already supplying Arla, a long-term premium milk price and the security of supplying milk to a farmer-owned co-operative that is investing in the future of the industry. We are also working to ensure that all of our farmer contracts are fully compliant with the Code.”
National Farmers’ Union dairy board chairman Mansel Raymond said: “Much now rests on the discussions that are to take place with farmer representatives in Arla Milk Link and Arla Foods Milk Partnership.”
But he warned: “Within the Dairy Contract Code, there are specific exemptions for potential and existing co-operative members, for instance the right to terminate a contract on three-months’ notice does not apply. It is vital that Arla shows strong leadership and a commitment to equitable contractual relations with farmer suppliers.”
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