Dairy code 'may need legislation'

A voluntary code to protect diary farmers from cuts in the price of milk may need to be strengthened with legislation, according to a report by the Welsh Affairs Committee.

Voluntary code over milk prices 'is best option'

MPs on the Welsh Affairs Committee say, after their short inquiry, that the voluntary code is supported by most farmers - but a mandatory code should be an option if it does not work.

The committee recommends any UK Government legislating is done in cooperation with the Welsh Government.

The events of the summer of 2012 brought to attention the difficulties faced by dairy farmers, particularly their powerlessness in the face of severe milk price reductions with little warning.

The people within the industry that we heard from mostly welcome the voluntary code and want to give it time to work. We believe adherence to a voluntary code is the best option. To give it the best chance, we urge all dairy processors who have not yet signed the code to do so.

However, if it does not work, Government should stand ready to ensure that fairer deal through a mandatory code.

– David Davies MP, Chair of the Welsh Affairs Committee

Voluntary code was agreed after milk price protests

The voluntary code over milk prices was first agreed at the Royal Welsh Show last summer.

After face-to-face talks, diary farmers and processors struck a deal 'in principle'.

The coce meant companies buying milk would have to give farmers a 'sensible' warning period before changing their prices.

Welsh farmers were involved in a number of protests.

It followed a series of protests and factory blockades by dairy farmers angry at cut to the amount they were paid for milk, which they said reduced the amount they received to less than it cost them to produce it.

Read More: Deal over voluntary code for milk prices struck at Royal Welsh Show

Watch: Welsh farmers involved in blockade of Somerset milk processing plant

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Legislation may be needed to protect dairy farmers

A voluntary code to protect farmers was introduced last year Credit: PA

A voluntary code to protect farmers from cuts to milk prices is the best option, but the industry must adhere to it, according to a report published by the Welsh Affairs Committee. MPs also say the Government must be prepared to legislate if improvements are not made.

Long-standing cost pressures on dairy farmers came to a head in a crisis in 2012, when processors announced a series of milk price reductions to be implemented at short notice. Some of the price cuts were rescinded following public pressure and a voluntary code of practice was introduced.

Dairy farming is of considerable importance to Wales, accounting for a third of all agricultural production and employing thousands of people. The dairy industry in Wales has an estimated total economic output of about £420m.