MPs demand dairy farmer protection
In a report published today, the environment food and rural affairs committee warns that, if farm-gate milk prices remain below the average cost of production, the government will have to ensure that UK dairy farmers are offered written contracts by processors.
These contracts should specify either the raw milk price or the principles underpinning the price, the volume and timing of deliveries as well as duration of the agreement.
"Unless such contracts are made compulsory, we believe there will be no improvement in the system that currently means dairy farmers have little certainty over the price they will receive for their milk," stated the committee chair Anne McIntosh MP.
The committee took evidence from those working in the dairy sector and concluded that, without government action, many more UK dairy producers would simply go to the wall, with highly undesirable wider consequences for rural communities, landscapes, tourism, and consumer choice.
Coincidentally, the main UK milk promotion organisation, DairyCo, published a report yesterday which highlighted the time lag that exists in the milk chain when the end price rises, with the primary producer not seeing any financial benefit for a long time.
However, if the end price for milk falls, the DairyCo report points out this fall in value quickly rattles back along the supply chain.
Pouncing on the findings of both reports, NFU Scotland vice-president Allan Bowie said they proved the status quo was no longer an option.
"If we are to have a sustainable dairy industry in the future then there has to be a fundamental shift in the way the dairy supply chain engages contractually with dairy farmers," he said.
"There is an overwhelming need for change in the way that chain operates and these latest reports fully endorse NFU Scotland's calls for transparent, market-related pricing mechanisms to be a compulsory part of all dairy contracts between producer and milk buyer."
Although the committee broadly supported the European Commission's proposals to allow dairy producer organisations to jointly set prices, they felt that this could lead to competitive distortions.
Not unexpectedly, given the high-profile proposals for large scale dairies in England recently, the committee called on Defra to promptly establish a position on this issue.
"These developments have potential, but further research is needed to establish what impacts such systems have on the environment and animal health or welfare. The government must not shirk its responsibility to set out an informed rationale for whatever position it adopts on super-dairies," said McIntosh.