During a recent meeting of the Farmers' Union of Wales Milk and Dairy Produce Committee, delegates felt that the Fair Dealing Obligations (Milk) Regulations 2023 would bolster the good practice many milk purchasing businesses in Wales and across the United Kingdom have developed and acted upon since the introduction of the Voluntary Dairy Code in 2012.

Brian Walters, acting Milk and Dairy Produce Committee Chair said: "It’s welcome news to see these regulations being put in place in order to stamp out rogue milk purchasing businesses from abusing their position and exploiting dairy farmers with underhanded business decisions and contractual loopholes.

“Several concerns and comments raised by the committee have been worked into this Statutory Instrument that will go some way in protecting dairy farmers from unfair practices.”

However, the committee felt that the regulations would do little to improve financial stability within a volatile dairy industry where the price paid for milk is heavily influenced by both domestic and global markets. An additional bureaucratic legal process where adjustments are made to agreements in order to comply with the regulations when they come into force will be another cost for the industry to accommodate.

"Apprehensions remain on the scope of the regulations and how effective they will truly be in providing farmers with a fair price for their milk in light of rapidly changing and challenging markets."

The intention of these regulations is to promote fair business between milk producers and purchasers. However, it is evident that further work is needed to improve the working relationship and promote the fair trading of milk along the entire dairy supply chain.

“Dairy farmers need to clearly understand their obligation to seek legal advice prior to accepting any milk purchase agreement and their rights to negotiate various details of the agreement, and to not accept the status quo of a given contract without thorough consideration," he added.

The Fair Dealing Obligations (Milk) Regulations 2023 Statutory Instrument is to be laid before the Houses of Parliament following the summer recess and is expected to come into force within 24 months.