BFREPA has launched a draft of its model contract that it says will offer a more balanced relationship between farmers and packers.
The organisation has been working with Birketts, a firm of solicitors, to draw up a document that it is hoped will give farmers more bargaining power when arranging contracts to supply eggs.
Birketts reviewed a range of contracts that Bfrepa members supplied to it late last year and found many to be “very one sided in favour of the buyer”.
At last year’s Bfrepa AGM, the association’s chief executive Robert Gooch said some of the agreements he had seen “were not worth the paper they were written on”.
He said many promised a minimum “breaking price” for second-quality eggs, but no guaranteed price for grade-A eggs.
In addition, many agreements are structured with no reference to input costs, leaving producers vulnerable to feed-price hikes.
The draft contract, which was launched on 23 May, suggests farmers enter into either 12-month fixed-price contracts for egg supply, or arrangements that link the price paid for eggs to the cost of feed.
For those on fixed-price arrangements, it says a review should be held every 12 months to adjust prices. If agreement over prices cannot be found, then it says an independent expert should be appointed to mediate between the two parties.
It also proposes a 14-day payment after receipt of invoice and suggests the membership of assurance schemes and the level at which a farm is insured is put into writing.
Speaking after the launch of the draft model contract, Mr Gooch said: “The general consensus is that something needs to be done to raise the level of awareness over the fairness of contracts.
“It is hoped that members will be able to use the model contract for guidance when negotiating now egg supply agreements with their packers in the future.”
Bfrepa is inviting responses to the draft model contract until 1 June, after which it will give packers four weeks to add their own comments. The final model agreement is expected to be launched at this year’s Bfrepa AGM, in early October.
