UK farmers angry at the cuts to the price they receive for their milk will continue their protests despite a deal on a code of practice to govern relations in the industry.

Retailers, dairy manufacturers and foodservice companies will be the targets of protests, Farmers for Action told just-food today (24 July).

UK dairy manufacturers and farming groups including The National Farmers Union yesterday signed a draft deal to adopt a voluntary code of practice to govern relations in the country's dairy sector.

The agreement, which came after talks brokered by the UK government, followed protests and blockades from farmers at retail and processor sites. Farmers have targeted the likes of Asda, Morrisons and Robert Wiseman Dairies after processors announced they would cut prices on 1 August.

However, Farmers for Action chairman David Handley told just-food his organisation would be "relentless" in its bid to pressure the country's dairy manufacturers to reverse the planned cuts and to push retailers to pay more for their milk. Handley also said the group would also target companies operating in the foodservice sector.

"We're out all week. We are going to be relentless on this, not only with the retailers but with the foodservice sector. We'll pile the pressure on," Handley said.

The NFU and dairy industry body Dairy UK yesterday agreed to what the farming union called "heads of terms" for a code of practice. The initial agreement sets minimum requirements for contracts between farmers and processors.

Handley doubted whether the code of practice would work. He said the Government should consider legislation if the code fails.

"We've got to start somewhere [but] I personally have my doubts of whether the voluntary code will work," he said. "We've got to do is convince the minister that we are prepared to give it a try on the understanding that, if after between three and six months, it has clearly been shown not to work, they have to go for legislation. There is no way that this industry can be allowed to get back to this situation ever again. Every 18 months to two years, somebody is trying to cut the milk price. We've got to start somewhere but I have grave reservations, knowing the people that are in this industry that are in the supply chain of dairy."

The National Farmers Union said the initial agreement for a code "gave some hope" for the long-term future of the sector. However, NFU president Peter Kendall said the deal "did not solve the dairy farming issues of today".

Handley said there was "total agreement" between the NFU and Farmers for Action that the draft deal did not alleviate the short-term pressure on farmers. "What we have clearly stated to the retailers, to the processors, to the foodservice industry is that you all need to have in place by 1 August a rescindment of any further price increases and we want the money that you took off us reinstated. That's the only thing we are focused on. All the other stuff will come but it's got to come after that happens," he said.

Retailers Asda, Morrisons, The Co-operative Group and Aldi have increased the price they pay for milk since the protests started. Handley argued the protests had paid off and led to some of the increases.

Handley called the hikes "a start" but added that this was "not enough". He described Morrisons' move as "miraculous".

"The Morrisons one is miraculous. Twenty-four hours before, there was no money in the supply chain. After a bit of farmer pressure outside their distribution centre, they find a massive 6p. I would imagine that is somewhere in the GBP15-20m. That should show everybody at government, retail and consumer level that the money is in the supply chain. The consumer does not have to pay a penny more," he said.

However, Handley said the increases announced were "not enough". He said: "The NFU and ourselves have clearly indicated that it's movement, it's not enough, we've got to get it right across the board. It's got to be the retail industry right through, the foodservice sector, all these organisations buy big, big quantities of dairy products at low prices.

"What we have clearly stated to the retailers, to the processors, to the foodservice industry is that you all need to have in place by 1 August a rescindment of any further price increases and we want the money that you took off us reinstated. That's the only thing we are focused on. All the other stuff will come but it's got to come after that happens.

"We've seen some movement by some; some have not moved quite far enough and need to move a bit further. They need to be aware that when it's done and dusted don't they try to come back in three or six months time and recover it as that is usually what they try and do. They get the publicity and get the consumer thinking they've been good boys and they find little ways to start to nibble at margins. They go on promotional activity and come back and put the pressure on the processor. That's why, if the voluntary code doesn't work, legislation has got to come in and stop it from happening."