The Munster Dairy Producer Organisation (MDPO) has urged its members not to sign the milk supply contracts issued by Kerry Dairy Ireland (KDI) last week.

“Farmers should not sign this contract,” the producer organisation stated.

The MDPO claimed that the contract does not deal with “the details of milk price setting”, and the organisation also objected to “major and new obligations on farmers” included in the contracts.

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“Kerry suppliers have been asked to enter a contract which will bind them to supply milk to KDI for at least four years and seven months up to 1 December 2030,” said James Doyle, chair of the Munster Dairy Producer Organisation.

This is a major and fundamental flaw in the draft contract

“In addition, farmers will have to give at least one year’s notice to terminate the contract, but they cannot end the contract before 1 December 2030,” he added. Doyle expressed concern that the board of Kerry Co-op will have no role in the setting of milk prices.

“Given the current arrangement between KDI and Kerry Co-op, the board of Kerry Co-op has no input into the milk price that KDI will set.

This is unacceptable

“This is a major and fundamental flaw in the draft contract and would in itself be sufficient for the draft contract to be rejected,” the MDPO chairman maintained.

Doyle also objected to clauses in the contract which give KDI the right to “carry out a full audit of the farm including feed inputs animal health and to enter the premises of the farm without notice where they suspect non-compliance”.

“This is unacceptable and even goes further than the statutory authority that the Department of Agriculture has,” he said.

Doyle called on KDI to enter into “meaningful and direct negotiations with milk suppliers” in order to agree an “acceptable and fair supply contract”.