Paice admits failure in bid for EU action on milk prices

By Andrew Arbuckle
Published on 17/07/2012 00:00

The UK farm minister, Jim Paice, emerged from yesterday’s EU Agricultural Council meeting in Brussels admitting that he had failed to get his colleagues to take on board the seriousness of the milk supply situation in Britain.

This failure came despite the meeting being presented with newly published figures showing milk production in Europe had risen by 2.2 per cent in the 2011-12 quota year.

The paper also predicted that worldwide supplies of milk would rise by 3 per cent this year.

This was largely thanks to countries such as New Zealand, which had already increased production by 9.9 per cent in the first quarter of 2012, and Argentina, which has pushed up production by 12 per cent in the same period.

Some crumbs of comfort for the milk sector came with increased exports last year of most of the main dairy products, with whey sales up by 23 per cent, skimmed milk powder up 22 per cent, condensed milk up 9 per cent and cheese up 4 per cent.

But the bottom line for all European milk producers is that they are getting less for their milk this year than last.

Paice said that he had spoken of the “desperate” situation for UK dairy farmers, where the problem, as he saw it, was market power rather than issues on intervention and support.

“The Community is not prepared to take any action but they will monitor the situation.” He said a number of ministers spoke about the present situation not being as bad as it was two years ago and as a result of which a special “dairy package” was brought in.

The problem for Paice is that, as far as the UK is concerned, that support package – which included a code of conduct between the various links in the supply chain – has not yet happened in this country.

Commenting on the latest position on the code, he said, “When I spoke last week I said I believed we were almost there. I am now going to bang heads together.”

Following several informal talks that have taken place in the last few days, he said he would organise one further meeting with the main players –the producers, processors and major retailers. That would be a “make or break meeting”, he indicated.

H also confirmed he would be attending the Royal Welsh Show and there he would meet ministers from Scotland and Wales along with EU agricultural commissioner Dacian Ciolos.

He confirmed that the milk situation would be part of the domestic political agenda but bristled when it was suggested that this was as a result of an initiative by Scottish rural affairs minister, Richard Lochhead.

“I am afraid Richard has been a bit naughty on that,” he said.” We were having a meeting anyway. He knew full well it has been organised for several weeks.”

However, a Scottish Government spokeswoman claimed that, while the ministers were going to the Welsh show, it was a Scottish Government proposal that will see the milk supply position being discussed.