Dairy farmers embroiled in a bitter dispute that has seen them blockading major UK milk processing plants reached a "significant" agreement on Monday in their battle over low milk prices.
In a draft deal, brokered by the government at a crisis summit, broad principles for a voluntary code of conduct were drawn up aimed at giving farmers more bargaining power.
Following 12 months of stalemate, and a ratcheting up of protests in recent days, the National Farmers Union (NFU) and Dairy UK, which represents the UK dairy supply chain, announced the framework for future talks, with finer details to be finalised by the end of August.
The agreement will seek to ensure supermarkets and buyers give farmers sensible notice before changing their prices, and allow farmers a get-out from contracts in order to negotiate better deals for themselves.
The development was announced following three hours of talks between the NFU and Dairy UK at the Royal Welsh Show, in Powys, chaired by farming minister Jim Paice.
In a statement, the NFU president, Peter Kendall, said the announcement gave some hope for the long term, but did not solve the dairy farming issues of today. "This agreement will give us the architecture we need to make sure that we don't end up with the same dysfunctional markets that are responsible for the dairy crisis we have today," he said. "We will spend the rest of this month collectively throwing 100% of our efforts into reversing the price cuts from earlier this year and rescinding the ones on the horizon on August 1."
Farmers, angered at the cuts in the price paid to them by processors, have warned they are being forced out of business.
They claim it costs 30p per litre (ppl) to produce milk, yet many were being offered 25ppl. According to the campaign group Farmers for Action, around 2,000 farmers and supporters blockaded plants in Somerset, Shropshire and Worcestershire on Sunday. It was not immediately clear if news of the draft agreement would avert further action.
Processors argue that they cannot afford to pay farmers more because the price of cream – left over after milk is processed – has fallen in the past year from £1,800 a tonne in June last year to just over £1,000 last month.
In the past week the supermarkets Morrisons, Asda and the Co-op – all singled out for criticism over the price they were offering – increased the premium they pay to farmers for their milk. But the fight for better deals continues.
After Monday's talks, Dairy UK said in a statement: "We are very pleased that heads of agreement have been reached on the voluntary code of practice. There is now a lot of work to be done on taking the code to the implementation stage and we are committed to doing this."
Defra said the code means that in future contracts between farmers and dairy processors will be freely negotiated, fairer and more transparent. Individual farmers will negotiate contracts covering issues including pricing and notice periods and farmers will have the ability to leave contracts more easily if they are unhappy with the price they receive.
Paice said: "I welcome the commitment all sides have shown to reaching an agreement. The government will continue to work with all parts of the industry to secure its long-term future, including promoting farmers working together in producer organisations."
