Dairy farmers must be paid a fair price for milk or processors face being tied to compulsory contracts, the new Farming Minister has warned.
Somerset MP David Heath, who took over the Government's agriculture brief following last week's reshuffle, said he was prepared to legislate if a much-vaunted voluntary code of practice failed.
The stark message represents a toughening of language from the Department for Environment, Farming and Rural Affairs against calls from MPs to have the threat of compulsory contracts on standby.
Mr Heath, Liberal Democrat MP for Somerton and Frome, was speaking at a Westminster Hall debate in the House of Commons that followed a summer of blockades from farmers over hefty cuts to the price of milk paid by dairies.
The keystone of the code is for buyers to give dairy farmers at least 30 days' notice of any changes to the farmgate milk price, and make it easier to break deals.
Dairy farmers face being paid less than the cost of production, meaning sharp cuts leave them in an even more parlous position.
While championing the need for the dairy industry to increase exports and form producer co-operatives, the minister said the code of conduct was the "biggest single thing" to improve the livelihoods of dairy farmers.
He told MPs: "It's a potentially momentous agreement. I hope it will start to open trusting relationships between the parties, because they need each other. And we can't have warring in an industry that is mutually dependent.
"I am strongly optimistic this is the best way forward for securing a sustainable arrangement. But we have an option of legislating on contracts – and I shall be very clear on this.
"I will seriously consider making contracts compulsory if the code fails to deliver the necessary changes."
The strong tone was welcomed by Devon MP Neil Parish, who was instrumental in securing the debate.
The Conservative MP for Tiverton and Honiton said: "I absolutely welcome the minister's comments that if [the code] doesn't bite then he will legislate. I believe if you have that threat to legislate behind the code then the code will work."
Aiming for supermarkets' generous profits from milk, he added: "There is enough money in what the consumer is paying for milk – it's just not getting back to the farmer."
Around 40 MPs packed Westminster Hall, with more than 20 making interventions during the three-hour debate. They called for the new groceries industry watchdog to be given more power, for "fair trade" milk akin to chocolate and tea to help British farmers get a better deal and the Government not to step back from a pilot badger cull to tackle tuberculosis in cattle.
Totnes Conservative MP Sarah Wollaston warned celebrities against "queuing up" to oppose a cull as it risked heightening tensions. "We know farmers are at great risk from vandalism and direct action," she said. "What they say can inflame the situation."