British Prime Minister Rishi Sunak delivered a significant announcement this morning, Tuesday, February 20, 2024, during his address at the National Farmers’ Union (NFU) conference.
The NFU responded positively to the announcement, emphasizing that the proposed regulations would bring about ‘transparency and accountability across the dairy supply chain.’
They highlighted key aspects, such as preventing unilateral contract changes, resolving issues regarding exclusivity and notice periods, and introducing clearer pricing terms. Additionally, the regulations aim to establish a system enabling farmers to verify variable price calculations.
Under the legislation, there will be an enforcement mechanism, empowering the secretary of state to levy ‘substantial financial penalties’ on those found breaching the rules.
This development follows over a decade of advocacy by the NFU and other UK farming unions, which have been vocal about unfair practices and power imbalances within the dairy supply chain.
Prime Minister Sunak, during his conference speech, announced plans to introduce new regulations for the dairy sector on Wednesday, February 21, 2024, along with initiating a review of the poultry sector.
Initial proposals for the legislation were put forth last summer, with ongoing refinement of the enforcement mechanism. NFU dairy chair Michael Oakes previously highlighted the imbalance of risk-sharing in the supply chain, expressing the need for farmers to better understand factors affecting their milk prices.
He also noted the absence of non-exclusive contracts in the UK dairy industry, advocating for farmers’ flexibility in choosing buyers while abiding by existing contracts.
Sunak further revealed intentions to introduce similar contract regulations for the pig sector later in 2024.
In addition to regulatory changes, Sunak announced substantial grants totaling approximately £427 million for farmers. These grants include £220 million earmarked for technology and productivity schemes, facilitating access to automation equipment to reduce reliance on foreign labor. Moreover, increases in management payments for the Sustainable Farming Incentive were unveiled.
Finally, the UK government pledged to publish an annual food security index to monitor food security levels, with the first publication slated for the upcoming Farm to Fork Summit in spring.
