Legislation should be brought forward which makes it compulsory for dairy processors to have written contracts with farmer suppliers, a senior government minister has said.

“If you are going to ask farmers to commit to quite a long-term contract, they deserve to know how the milk price will be calculated. For too long, it has been too easy to just dump liability on the farmer when things are going wrong,” Defra Secretary George Eustice said.

Speaking at the Conservative Party conference, Eustice argued that supplier contracts with pricing mechanisms would help processors when they are selling products.

“If they get more clarity about what they are going to need to pay their farmers then they will hedge their own risk in the market. They can do that, they just have been too lazy to do it to date because it’s been far easier to just drop the cost on to farmers,” the Conservative MP said.

A public consultation on mandatory milk contracts closed to responses last month.