Protection for dairy farmers urged

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Published: Tuesday 20th January 2015 by The News Editor

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Dairy farmers need greater protection in the face of sharp falls in the price of milk, MPs have said.

Since last summer the dairy industry has been hit by significant falls in milk prices in the face of rising supply and falling demand, particularly from China and as a result of the Russian trade ban.

The sharp reversal in fortunes, coming after prices hit their highest level for several years, has been driving dairy farmers out of business every week, with the total number in the UK falling to below 10,000 for the first time.

The parliamentary Environment, Food and Rural Affairs (Efra) Committee urged the Government to extend the Groceries Code Adjudicator’s (GCA) remit to include dairy farmers in the scheme, which covers suppliers to the big supermarkets and retailers.

MPs also called for ministers to help dairy farmers tap into worldwide export opportunities and press for clearer “country-of-origin” labelling so that consumers know if they really are buying British, and for an EU review of the protection against very low prices.

The committee’s chairwoman Anne McIntosh said: “The volatility of worldwide and domestic milk markets is making financial planning and investment impossible for small-scale producers unable to hedge against changes beyond their control.

“The vast majority of dairy farmers fall outside the protection offered by the Groceries Code Adjudicator.

“She can only investigate complaints involving direct suppliers to the big 10 supermarkets and retailers, and as most milk production is small-scale, that excludes most dairy farmers.

“The Efra committee thought that was wrong when the GCA was set up in 2013, and events since then justify our view that her remit should be extended to include small-scale suppliers, whether or not they have a direct relationship with the ultimate seller of their produce.”

She also said the committee was “shocked” to learn that the adjudicator was still unable to levy fines on retailers because the Government had not yet set the level of fine she could seek, and called for the power to be activated before the general election.

In a report on dairy prices, the MPs also called on farmers to consider forming “producer organisations” to increase their clout in the market.

A Government spokesman said: ” We understand the concerns of British farmers over the current pressures on milk prices caused by the volatility of the global market and we are doing all we can to help manage this.

“This includes giving dairy farmers the opportunity to unite in producer organisations so they have greater clout in the marketplace.

“We have also brokered a dairy industry code of practice on contractual relationships to improve transparency and give farmers a fairer deal, which now covers 85% of UK dairy production.”

He added that it was important to remember that the long-term prospects for the dairy industry were good.

“We are helping the dairy industry to take advantage of opportunities such as opening new export markets and pushing for better country of origin labelling for British dairy products.

“We strongly support the work of the Groceries Code Adjudicator. Its jurisdiction is currently limited to the scope of the Groceries Supply Code of Practice, and does not cover pricing – which is the responsibility of the Competition and Markets Authority. There will be a statutory review of the GCA next year.”

Published: Tuesday 20th January 2015 by The News Editor

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