The European Milk Board (EMB), a body representing dairy farmer organisations in the EU, has said that it "regrets major loopholes" for the dairy sector under upcoming new rules on agri-markets.

The Council of the EU and the European Parliament have reached provisional agreement to give farmers a "stronger negotiating position" in the food supply chain.

The council reached a provisional agreement with the parliament on a targeted amendment of the regulation on the common market organisation (CMO) of agricultural products.

The aim of the new rules is to give farmers a "stronger negotiating position in the agri-food supply chain".

The updated rules aim to support more balanced and resilient supply chains, including making written contracts a general rule and reinforcing producer organisations.

However, the EMB - of which the Irish Creamery Milk Suppliers' Association (ICMSA) is a member - has warned that some weaknesses in the new regulation could "considerably limit" the benefit of the rules for EU dairy farmers.

The EMB acknowledged that the agreement on the updated regulation contained many positive aspects.

"One key positive aspect of the agreement is the strengthening of farmers’ position with regard to contracts. In the future, written contracts are to become mandatory," the group said, adding that this will represent an important step towards improving the bargaining position of producers.

The EMB also welcomed a move to include mandatory revision clauses in contracts, as well as indicators designed to increase price transparency.

However, the group criticised the provision allowing for member states, after consulting with the dairy industry, to decide that these revision clauses and indicators do not need to be applied.

The EMB also said that the situation for members of dairy co-operatives "also remains particularly critical", with no mandatory contracts foreseen for those farmers.

This is because the new regulations "incorrectly assume that co-operative statutes already ensure sufficient transparency", the group claimed.

"Reality, however, shows a very different picture: many dairy farmers today do not have sufficient transparency or influence over price formation, particularly within co-operatives," the EMB said.

"Since a large share of milk producers are members of co-operatives, very little will effectively change for many dairy farmers and the current status quo will largely remain," the group added.

The dairy farmer organisation also raised concerns for other sectors.

The group said: "Exemptions for other agricultural sectors go even further... Member states will now be able to decide that written contracts are not necessary in non-milk sectors."

According to the EMB, the only requirement for a member state to decide this is a consultation with sector stakeholders and an assessment that price transparency is already sufficiently ensured or that written contracts would not be appropriate for "justified reasons".

"The...agreement...brings important progress regarding farmers’ rights in contracts and greater transparency in price formation. At the same time, however, serious loopholes remain – particularly in the milk sector and in other agricultural sectors," the group said.

"Without closing these massive loopholes, the situation of farmers will not improve sufficiently to keep active farmers in production and to offer young people a real perspective and encourage them to enter the sector," the EMB warned.