AHDB’s Dairy Contracts Legislation briefing tows the Unions Line on contract legislation

Ian had a sneak preview of AHDB’s latest briefing ahead of its publication on their website yesterday.

Its certainly a political hot potato and could easily have been written by the NFU’s and over stamped with AHDB’s Market Intelligence branding.

Four pages of the 10 page briefing are devoted to reviewing how legislated milk contracts in Italy, France and Spain operate yet no mention is made of the fundamental basics as to whether such legislation is delivering those farmers a consistently better milk price than that paid to GB farmers under discretionary pricing.

On page 5 there is a curious 1 to 5 star rating which clearly gives a high star rating to formula pricing and a very low star rating to the current buyer discretion pricing. This is likely to be a hot topic for discussion and further analysis/challenges.

The one statement in the reports summary which had Ian rolling his eyes back and taking a double take was the one claiming that relationships where farmers and processors work in partnership towards a common goal having strong lines of communication are not widespread in GB. The report concludes “unfortunately those types of relationships are not widespread.”

This must be a typo because GB wide such relationships are fortunately widespread with farmer representation, PO’s, Co-Ops etc eg, Muller, Arla, First Milk, Barbers, Tesco, Sainsburys, Saputo Dairy UK (AKA Dairy Crest), Lactalis, M & S, SCC plus more.

Surely it’s a fact that ineffective or non existent supply chain relationships which allow some smaller milk buyers to steam roller over supplying farmers with unacceptable changes is the problem and there are only a handful of rogues. Frankly Ian doubts any legislation would change how these rogues operate and in some respects legislation could play into their hands.

These are the bad apples. More on that in Ians July Dairy Farmer Article.

The conclusion is its a bit like Ians school reports AHDB could do better than this and should do but read it and make your own minds up.