The Voluntary Code of Practice in the dairy sector

Current status: Report published and Government Response received

Dairy farming accounts for 17% of UK agricultural production by value and is the single largest agricultural sector at £3.7 billion. Wales has about 1,900 dairy farmers—about 20% of the total amount in England and Wales—yet the number of farmers has declined steadily since the end of the last century. There are now 40% fewer dairy farmers in Wales compared to 2002.

During the summer of 2012, the industry suffered a major crisis caused by price cuts announced by retailers and processors. Although some price cuts were subsequently withdrawn, the long-term sustainability of the industry is uncertain. The industry is operating at a £1.2 billion trade deficit. In July, farm leaders and dairy processors agreed the principles for a new voluntary code of practice on contractual relationships in the dairy sector. The UK and Welsh governments support this move. The UK Government is also providing £5 million worth of new funding under the Rural Economy Grant scheme to assist dairy farmers.


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