The Code of Good Practice for Dairy Contracts was not working properly and should no longer be voluntary, said Rob Harrison, chairman of the National Farmers' Union South West dairy board.
Against a backdrop of sharply declining milk production, severe shortages of animal fodder and bedding, and significantly higher production costs, the existing voluntary arrangement needs to deliver for producers, and fast, he said. But he felt the Government should enforce it with legislation. He said: "With high world prices for milk products, there is no reason whatsoever why the middlemen dairy processors in this country should not be demanding higher prices for their producers from those they supply further up the food chain, instead of trying to curry favour with them by meekly accepting whatever unsustainable price they are prepared to pay.
"If not, massive cash flow problems and the inability to invest at farm level is going to squeeze the lifeblood out of the industry for the future, meaning much lower levels of domestic milk production and far higher dependence on imports, particularly cheese, which is not in the long-term interests of anybody, least of all consumers." The code emerged last summer after widespread and high-profile protests by dairy farmers about the payments they were receiving, and after five processing dairies had threatened to cut those payments. It was devised by the Dairy Coalition, a grouping formed at the time by farming unions, but it was always voluntary.
Mr Harrison said that the code had been thrashed out by the industry at the behest of the Government, but it had not been signed up to by all dairy-processor middlemen.
"We need them all to sign up as a matter of urgency and we need to see improvements pretty soon, with the Government, which brokered the code, spelling out exactly how it will be measuring its impact and over what time scale," said Mr Harrison.
"Frankly, after having got into such a lamentable state over such a long period, we haven't got long to sort the industry out, and if the voluntary code fails to deliver what the Government envisages, it must be prepared to legislate to enforce its intentions."
A month ago nearly 400 Westcountry dairy producers gathered for a special crisis meeting in Holsworthy, vowing to stick together to ensure fair payments.
Currently payments for a standard litre peak at around 33.5p, but the industry reckons farmers need at least 30p, and probably considerably more, to make a profit for reinvestment.