August 1, 2011


UK government encouraged to give clear, open milk contracts



If the UK government wants to stop departure of producers from the dairy industry, it must make sure that dairy farmers are awarded clear and open milk contracts, according to a cross-party group of MPs.


According to Darlington and Stockton Times, members of the cross-party Environment, Food and Rural Affairs committee said the government must set out a clear strategy to improve the state of the UK's dairy industry.


In a report published on Friday (July 29), the committee said ministers also needed to step in to ensure dairy farmers were offered written contracts by processors that specified raw milk prices, volume and timing of deliveries.


Length of agreements should also be agreed so that farmers were given some certainty over the value of their milk.


"Without government action, many more UK dairy producers will simply go to the wall, with highly undesirable consequences for rural communities, landscapes, tourism and consumer choice," said Anne McIntosh, EFRA committee chairwoman.


"We found DEFRA's lack of an action plan disappointing."


The committee said that growing global demand for dairy products and the impending abolition of EU milk quotas meant there were significant opportunities for UK dairy farmers.


But farmers would be unable to capitalise on the market's potential unless the imbalance of power between producers and buyers was addressed.


McIntosh said the European Commission's proposed Dairy Package did not do enough to redress the problems facing producers in the UK.


Plans to allow dairy producer organisations to set prices could lead to competition distortions unless greater safeguards were put in place, she warned.


The NFU said that while the commission's package was a starting point, more needed to be done to address the failures in the market place for raw milk at farmgate.


Mansel Raymond, NFU dairy board chairman, said, "Dairy farmers have been the losers in the UK dairy supply chain for too long now. Today I am drawing a line in the sand and challenging each and every milk purchaser to step up to the mark and give their farmers the equitable trading conditions they deserve.


"UK dairy farmers are some of the most efficient, skilled and committed in Europe, so it is frustrating that we have got to the stage where the UK has the lowest milk price in the EU.


"We must stop the continued shrinking of our national herd and use better contracts and negotiations to ensure our dairy farmers get a fair return on their investment and to see a vibrant industry for the next generation."

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