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A report into the dairy industry in Scotland by researchers and analysts from SRUC and AHDB has recommended that farmers should not be forced to sell all their milk on to one processor.
As part of their work, the report authors also looked across Europe at the current state of the dairy industry and wider supply chain, and concluded that exclusivity clauses in contracts should be removed, and replaced with clauses that stipulate volume, price and minimum contract time.
The report adds to increasing pressure to implement mandatory written contracts (MWC’s) between processors and farmers.
“In general, the study does not find reasons why the MWCs cannot be applied to the Scottish dairy market,” notes the report.
It also recommends that the Scottish government should encourage farmers to form producer organisations (POs), which would potentially benefit both farmers and processors. At present in Scotland, farmer-owned co-ops handle about 45% of milk supply.
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