The Bishop of Hereford spoke in a debate on the draft Fair Dealing Obligations (Milk) Regulations on 25th March 2024, welcoming the new regulations and the benefits they would bring to the dairy farming sector:
The Lord Bishop of Hereford: My Lords, I applaud His Majesty’s Government for these new contract regulations. They are both comprehensive and long overdue in addressing matters of serious injustice in the dairy farming sector. Unfair milk contracts have been an area of concern for the dairy sector for many years, going back to the voluntary code of practice for dairy contracts, introduced in 2012. In their current form, most milk contracts do not create mutually balanced business relationships between buyers and sellers. Rights and obligations are often heavily biased in favour of buyers.
At times of pressure, purchasers have been able to change contract terms and pricing mechanisms, in some instances even introducing retrospective penalties and price cuts without negotiation. The Covid-19 crisis saw many of these scenarios play out. Farmers were hit with price cuts at no notice, a lack of transparency on pricing, and delayed payments, resulting in significant pressures on producers during this challenging period.
These regulations will see freely negotiated and fairly balanced contracts, tailored to the needs of both buyers and farmers. They mark a significant step forward. It will be important for industry and government to help support the development of farmer representation structures, such as producer organisations within the dairy sector, to make the most of the regulations and improve trust and collaboration across the supply chain.
This legislation contains extensive powers for the Secretary of State to oversee and enforce the code. I welcome the recruitment of the agricultural supply chain adjudicator, who will, among other things, enforce the regulations on behalf of the Secretary of State. Can the Minister clarify whether it is intended that the person appointed to this role will learn from the operation of the Groceries Code Adjudicator, which has been in operation since 2013?
Extracts from the speeches that followed:
Baroness Hayman of Ullock (Lab): These draft regulations, as we have heard, propose to introduce minimum standards for the contracts that businesses use when purchasing milk from dairy farmers. We fully support the aim to improve fairness and transparency in the UK dairy sector, which, according to Defra, is characterised by small, fragmented dairy producers. We have heard a lot about the unfair commercial terms on which farmers have had to go into contracts, so we very much support this SI. Like other noble Lords, I thank the NFU for its work on this issue. The NFU has made it clear that it strongly supports the regulations, as unfair milk contracts have unfortunately been an area of concern for many years. The right reverend Prelate the Bishop of Hereford talked about the voluntary code of practice for dairy contracts, which came in in 2012. This has clearly not been working, so we very much welcome the regulations in front of us today.
Lord Douglas-Miller (Con): I move on to the issues around the adjudicator, which were very eloquently expressed by the right reverend Prelate the Bishop of Hereford. The noble Lords, Lord Curry and Lord Grantchester, also touched on many of the issues, and the noble Baroness, Lady Hayman, talked extensively about them, so let me talk a bit about the role that the new adjudicator—the enforcement agency, if you like—will have. Our new adjudicator will focus on the first stage of the supply chain, on a sector-by-sector basis. We are confident that this targeted approach, looking in-depth at specific areas of the supply chain, will be very effective. We are currently recruiting our new agricultural supply chain adjudicator. The final decision will be taken by Ministers following the due Civil Service process. I have taken on board a lot of the comments made about the skills necessary for this individual and how we would like to replicate the process that was so successful with the Groceries Code Adjudicator.
The Church of England in Parliament 
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