Dairy farmers could be given the power to negotiate better contracts with milk buyers under plans backed by MEPs on the European Parliament’s agriculture committee.

The report, written by Northern Irish MEP Jim Nicholson, calls for mandatory contracts for all Member States that set out the milk price payable, how the price is calculated, volume specifications, and all terms to be freely negotiated between parties.

The NFU believes the move would be a major step towards re-balancing the power in the dairy supply chain.

NFU dairy board chairman Mansel Raymond said: “When ten dairy farmers are going out of business every week, as is the case in the UK, it is clear something has to be done. Current milk contracts offer no certainty or clarity to farmers. The price of milk can vary from one month to the next leaving farmers with no security of what they’ll be paid for their milk.

“Too many farmers are locked into a contract with long notice periods and no ability to alter the situation– this proposal will allow for better negotiation of contract terms both before signing and during the contract term. Importantly termination clauses also make up part of the plans. We hope these proposals will help redress the power balance between producers and processors to give dairy farmers longer term certainty over their milk price, volume and contract length.

“In another positive move the MEP proposal also gives Producer Organisations the ability to negotiate a higher volume of milk for their members – up to 40 per cent of national production. There is also guidance on how to set up Producer Organisations and Interbranch Organisations to benefit the sector.”

The report, which comes in response to recommendations made by the European Commission’s High Level Group on dairy, will be put to a vote by all MEPs in the autumn. The European Parliament and Agriculture Ministers must agree on the final text before it becomes law.