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New dairy legislation which aims to protect farmers across the supply chain have come into force following more than a decade of campaigning by farming groups.

As of this week, the Fair Dealings Obligations (Milk) Regulations 2024 will apply to all new contracts made for the purchase of milk from a producer. The NFU said it is hoped the new rules will establish ‘transparency and accountability' across the dairy supply chain by stopping contract changes being imposed without agreement.

According to Defra, there will also be a system in place to enable farmers to verify the calculation of variable prices. 

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NFU Dairy Board chair Paul Tompkins said it marked a ‘significant step' in a long road of campaigning to improve fairness across the supply chain.

"The NFU has long been campaigning for fairer, more transparent contracts to aid trust and collaboration across the supply chain and prevent some of the worse abuses of power which one-sided contract terms allowed.

"Any new contract offered to a producer must be compliant with the new regulations. This means, among other things, it must offer a clear, transparent price or pricing schedule."

The regulations also include an enforcement regime, which allow Secretary of State Steve Reed to impose substantial financial penalties to entities who make any breaches.

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There will be a transition period of 12 months for existing agreements. All such contracts will need to be compliant with the regulations by 9 July 2025. 

Scottish Dairy Hub and NFU Scotland Milk Policy manager Tracey Roan said the change had followed a consistent campaign by the unions of ‘calling out unfair practices in the dairy supply chain'.  

"A significant proportion of the calls that all UK farming union dairy teams receive are from farmers with issues which ultimately relate back to their milk contract," Ms Roan said. "It has taken a great deal of work from a dedicated team within NFU Scotland to help drive this over the line."