Will government negotiators and processor/retailer lobbies perpetuate toothless contracts?

18 05 2012


Ian Potter Associates Weekly Bulletin, No. 671, reports that the 2ppl backdated price cut from Lanchester Dairies in Durham took effect on 1st May.

This has sent some of its farmer suppliers ‘into orbit’ and their only remedy is to explore the legality of the move and/or tender their resignation. There is simply no defence for abusing farmers with a backdated cut.

One Lanchester supporter claims this is a breach of contract because in the contract it states 30 days notice of any changes.

On Thursday, whilst chairing a Dairy Supply Chain Forum, minister Jim Paice told processors who would not agree to a voluntary code of practice that he will consider introducing EU legislation on compulsory contracts.

But Hansard records that already “Member States may, within their own contract law systems, make the use of such contracts compulsory”.

However government negotiators and processor/retailer lobbies will resist European Commission requirements for these contracts to include price, volume, timing and duration – very different from Britain’s leaky variable ‘flexible’ contracts already in force.




To save the dairy industry supermarkets must reduce their excessive margin and pass some of it back to the producer

13 09 2011

We have already posted the Scottish Farmer’s report on the words of James Paice, the farms minister at the Dairy Show and yesterday we received a press release from Eric Howells [Wales, dairy farming] giving his reactions. 

Some farmers attending the Dairy Event at Birmingham last week were looking for new ideas to expand their dairy herd, while others went there looking for ways to consolidate their business and hopefully improve the profitability of their enterprise. I hope that they did not go home disappointed. 

The greatest disappointment of the week was caused by the comments by Mr Jim Paice, who said “The UK government would not support compulsory legislation introducing compulsory contracts”. He then went on to say ”I very much want to see improvement in the bargaining power, the contractual relations and the share of the revenue for dairy farmers as part of enhancing the whole industry.” 

What empty talk from a government minister who should be offering hope and encouragement to an industry that is on its knees. 

Does he not know that milk is delivered to the supermarkets in the morning and is sold by the afternoon on a profit margin that is more than double the price received by the producer? In addition they do not pay for that milk for three months, while the farmer has to wait up to three years before that calf starts producing milk. 

Is he not aware of the difficulty the industry has when negotiating for a fair price from the supermarkets? The housewife is paying enough for their milk over the counter and all that is needed to save the dairy industry is for the supermarkets to reduce their excessive margin and pass some of it back to the producer. 

The government moved very quickly when they took the monopoly powers away from the very efficient Milk Marketing Board and later Milk Marque, so why do Mr Paice and the government not apply the same rule to the supermarkets, who have proved very conclusively that they are exploiting their position given to them by the government? I am waiting Minister. 

Mr Paice’s salary and expenses are greater than the turnover of many farmers who have to pay all the farm expenses, allow some of their income for reinvestment and if there is any left, support their family.     

We are told that the nation is in deep recession and may get worse not better because the manufacturing industrial production is not increasing as the government had hoped. At one time Gt. Britain was 70% self sufficient in the food it consumed, this has now fallen to 50%. 

Given the green light by Mr Paice and the government the agricultural industry is raring to go, thereby saving on imports and helping to balance the nation’s books. 

Elementary dear Jim, elementary. Why did you not say that last week? 


Looking to the future of farming, symbolised by the young farmers in the picture, later this week we will post the persuasive words of Alistair, a Scottish farmer’s son, advocating Fair Trade for British farmers: 

“People buy Fair Trade because they want to do what is right for the developing world and they want to support a fair and just economic system. The same dynamic could easily apply towards British produce.”