Challenging issues for Arla One Contract sign up in mainland Europe but no issues raised with our NFU’s

As we rapidly approach the 30th April Arla one contract sign up deadline the news from Mainland Europe is some farmers and their representative organisations are unhappy with the new One Contract terms.

The Danish dairy farmers Union LDM have appointed two lawyers who have studied Arla's One contract and terms, and both lawyers have issues which Arla will have to address or are addressing.

First is the threat a non signing farmer will be given notice and his contract terminated  after one year on 1st May 2020,  which they claim is illegal and contrary to Arla's own Articles of Association, as well as basic Danish co-op rules. LDM claim Arla have admitted this is a valid complaint and have agreed to withdraw the threat.

Ian had an email exchange with Arla over this and two other clauses back in March, and on further reading of the comprehensive Arla response it does appear that this threat cannot be implemented and Arla have rewound.

In addition, LDM is in opposition to point 13 in the contract which is affectively a gagging order on each individual member which they refer to as the “mouth basket” rule or confidentiality clause. Once again LDM claim Arla has accepted that it needs to revise this wording and dilute it down.

Finally LDM is in opposition to point 15, which moves power from the board of representatives to the board of directors.

The end result is that Arla are expected to issue a legal appendix to the new contract shortly.

It is a certainty that any changes spearheaded by the Danish, German and Swedish representative organisations will be unilaterally applied to all Arla members.

For Arla it will certainly make life simpler and tidy up the terms all members adhere. Its hardly surprising farmers in Denmark are scrutinising the detail forensically, given the fact Arla are such a dominant milk buyer and no alternatives are available to supply other milk processors.

Here in GB, though, sign-up is proceeding almost as planned and almost complete with allegedly 90% plus of GB farmers signed up to the new contract. Bizarrely, given the cacophony of noise and decades of chest beating and self flagellation over contracts by the farming unions there has been on this issue... silence and dutiful acceptance that all is right and all is well.

James Osman, Chief Dairy Advisor for National Farmers Union commented to Landbrugsavisen (a leading Danish Farm publication ) that UK-farmers have no significant problems with the agreement. Ian has recently had email correspondence with both NFU Scotland and NFU, and neither are aware of any specific concerns having been raised with them.

That’s a head scratcher, because the two NFUs are placing significant importance and urgency on the absolute necessity for Government to push through contract legislation and reform. It's not many weeks ago that the NFUs supposedly had loads of members highlighting it was a big problem...  yet non of them must supply Arla as there have been no questions from GB farmers and no questions from the NFU’s! Still, despite this lack of an issue among grass roots Arla farmers (which is also echoed by most farmers supplying most processors) the NFU's will press on with their contract reform bombast, regardless.

This article appeared in a recent Danish agricultural paper which we have had translated and summaries the position.

So is the opinion of other countries' milk producers on the Arla agreement

In Denmark, LDM has been highly critical of Arla's new supplier agreement. In other countries, they also look at the paragraphs.

It is not only the National Association of Danish Milk Producers who are critical of the agreement, which Arla has during the last month's time tried to get its members in Denmark and abroad to sign.

The supplier agreement, which is a legal document, will in future regulate the rights and obligations of the members of the dairy company. According to the dairy company's own announcement, the agreement is created because you want to digitise its agreements with the members, rather than having them lying on paper and there is nothing new in the agreements.

But several critical voices have since criticised the agreement back in February criticised the agreement to make milk producers significantly worse than before.

At LDM one has gone so far as to directly discourage its members from signing the agreement. And Thursday evening, a meeting was held in Agerskov, where two lawyers with knowledge of agriculture, directly advised farmers NOT to sign - and to withdraw signatures if they have already signed.

According to chairman Stefan Gård, the Swedish milk producers in the Swedish Milk Farmers are still looking at the agreement and have not yet come up with a recommendation to the members.

The same goes for the German association, BDM, the Bundesverband Deutsche Milchviehhalter. Here, however, one is somewhat cautious about commenting - on the grounds that Arla has threatened that you can be thrown out as a farmer if you do not sign or if you talk about the company publicly in the future.

"It's a bit of a problem we've talked to several critical Arla owners. But they are afraid to talk about it because they don't want to lose their contract," a BDM employee says.

"You can write that we see the changes as a problem. The changes only benefit the company. We haven't decided on an official position yet. But if it were me, I wouldn't sign it," he says.

NO ESSENTIAL ISSUES

According to several reports from Arla, the most criticized point in the agreement, namely the confidentiality clause, comes from England, where it is more normal than in Denmark and Sweden. In England, too, the agreement has not been identified as a problem, says National Farmers Union Dairy Department.

"Some of our members have contacted us with their concerns about the contract and we are reviewing it from a legal point of view, but so far we see no significant issues," writes James Osman, chief adviser of the dairy area of the National Farmers Union in a written feedback