NFU welcomes Diageo move over contracts for cereal growers

IT HAS been a bone of contention between the two parties for a long time but yesterday the National Farmers Union of Scotland welcomed moves by drinks giant Diageo to provide long-term supply contracts to cereal growers.

By The Newsroom

Published 28th Jan 2010, 18:03 BST

Updated 28th Jan 2010, 18:24 BST

Alan Williamson, procurement manager, for Diageo, said the company remained committed to sourcing the vast majority of its cereals from Scottish growers. As such, it has been working over the past two months with malting barley suppliers to trial a new arrangement which should give growers a measure of control over prices.

The new "Premium to Wheat" contracts give growers a premium of 20 per tonne over the November wheat futures price for 70 per cent of their committed annual tonnage for a three-year period. Initially it is being offered to a small number of growers on a trial basis.

NFU Scotland vice-president Allan Bowie saw the early availability of contracts as an opportunity for cereal growers to plan ahead and manage some of the risks associated with producing a premium crop such as malting barley.

Williamson said the scheme would be reviewed at the end of the season with a view to looking at the feasibility of extending availability for 2011.