Cash must be found to help Scots dairy industry

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Among the papers currently lying on Richard Lochhead’s ministerial desk is a review of the Scottish dairy industry. This was commissioned last November following a turbulent couple of months where milk producers held angry meetings on the price they were being offered for their milk.

The review team was asked to look into the long-term future for the milk industry. Even though the report has not been published, there can be a reasonable amount of certainty that it will focus on improving the manufacturing potential or added value that can now be gained from dairy products.

Why am I certain about that? Well, the author, James Withers, formerly chief executive of NFU Scotland and now occupying a similar role with Scotland Food and Drink, has a gleam in his eyes whenever he talks of the potential for expanding this country’s food production capacity.

There can also be no doubt that, while increasing market opportunities will form a major part of the review’s recommendations, there will be others on strengthening the links in the milk chain which have, for the past century, seemed to favour those buying the milk and not those producing it.

I am curious as to why the review has not so far emerged into public view. The Scottish Government is a master of publicity management and the report may be held up as part of an organised programme over the next 12 months to prove that an independent Scotland can be a proverbial land of milk and honey. But I would hope the review could be more than a political football.

There has long been a need to take a critical look at one of Scottish agriculture’s main sectors and ask where its future lies. As can be seen by inspecting the shelves of dairy produce on sale in major supermarkets, other countries have been far more proactive in developing new products.

The UK’s major farmer-owned milk processor, First Milk, has made the development of new dairy product lines one of its priorities and that must be for the long-term good of the industry.

The company’s outgoing chairman, Bill Mustoe, hammered out the message of getting more value out of milk time and again and it can be assumed his successor, former UK farming minister Sir Jim Paice, will not change that tack.

I must confess here that I was a little taken aback by the appointment of Paice to this top job. He has the advantage of knowing the corridors of political power and added to that a background in farming, having been a farm manager before heading off into the political limelight. But his role as farm minister was dramatically cut short last year as he was in the midst of an announcement on the voluntary code of practice for milk contracts, and some saw his sacking in a Cabinet reshuffle by David Cameron as rather brutal.

Paice has admitted he was taken aback by his loss of office but as a long-standing MP, he should have known that politics can be a brutal business.

My concerns on his appointment are based on a number of factors – the first being I did not think much of his performance last year when faced with a hall full of angry dairy farmers. His speech to the milk producers provoked several rounds of booing, and his poor handling of the issue may well have contributed to his ministerial demise.

I am also concerned about any future conflict between a Scottish Government and First Milk led by a Westminster parliamentarian.

As far as I know, Paice will continue to be an MP up to the next UK parliamentary election, which will be held in May 2015. As such, his time to chair First Milk will surely be constrained.

But enough about Paice. The bigger issue is taking the milk industry forward, and with the likely recommendation in the review to be one of more manufacturing capacity in the future, the question for the Scottish Government is how it will promote more product development in this country.

Financially, one of the few incentives it has is its food and marketing grant, but the cash in this will be squeezed under the Common Agricultural Policy budget.

Despite the squeeze, I would hope money is found to help milk processing companies develop their product range – a much better investment I would say than pouring public money into organic farming and farm shops. Both of which I support – but only as commercial entities, not as beneficiaries of the public purse.

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