Milk Row: Dairy Farmers Strike A Deal

Dairy farmers have agreed a deal with milk processors, resolving a stalemate over price cuts after days of protest.

After hours of talks at the Royal Welsh Show in Powys, both sides agreed to sign up to a voluntary code of practice for milk contracts.

This means firms buying milk, such as big supermarkets, will have to give a "sensible" notice period when changing prices to give farmers a chance to opt out.

The summit came after more than 2,000 farmers took part in a third round of protests over the move to cut prices by 2p per litre.

Plants near Bridgwater, Somerset, Droitwich Spa in Worcestershire and Market Drayton in Shropshire were all blockaded on Sunday night.

Farming minister Jim Paice said: "We have got a signed agreement and both sides will now work on the detail over the next few weeks.

"It does mean that any producer will get a sensible notice period of a change of price from their processor and they will be able to give three months notice if they want to quit."

Mr Paice made clear that the Governent could still opt to legislate if the code fails to work, and could make contracts compulsory - but even then, it would still not be able to dictate prices.

Farmers For Action (FFA) had argued that the recent 2p per litre cut in the price they are paid, combined with rising feed costs, would drive many dairy farmers out of business.

National Farming Union (NFU) president Peter Kendall said the announcement did give some hope for the long term but warned it did not solve problems they face on a daily basis.

He said: "This agreement will give us the architecture we need to make sure that we don't end up with the same dysfunctional markets that are responsible for the dairy crisis we have today.

"The farming community is more united than ever before and the strength of feeling on this dairy issue is increasing and not decreasing.

"We will spend the rest of this month collectively throwing 100% of our efforts into reversing the price cuts from earlier this year and rescinding the ones on the horizon on August 1."

Mr Paice will also hold a meeting with the big supermarkets later in the week to get them to sign up to a voluntary code.

Campaigners want all major supermarkets and their suppliers to sign up to an agreement that would give them a price to ensure their businesses are viable in the long term.

The Co-Operative and Morrisons supermarket chains have responded to the protests by announcing rises in premiums paid for milk to farmers.

And from August 1, Asda is increasing the premium it pays by 2p per litre, which means its 272 Dairylink farmers will still be paid 27.5p a litre - offsetting a cut by milk processors Arla.

The extra premium works out at around £30,000-a-year for a Dairylink farmer.

Asda's commercial director for dairy Karl Martin said: "We have listened to the concerns of our dedicated dairy farmers and recognise the financial pressures they are under."