Kendall calls for Defra to join things up on dairy

The Government should get behind the European Commission’s Dairy Package, NFU President Peter Kendall told the Semex Dairy Conference in Glasgow today.

Dairy farmers demonstrating at supermarket depots in the freezing cold, the infamous case of the missing milk millions and the fact that farmers are losing money on every litre of milk they produce were, he explained, sure signs of a serious problem with the way the market works for dairy farmers in this country.

Mr Kendall gave the example of a telephone call he received from a Cumbrian dairy farmer last week who pointed out that his local pub had put the price of a pint of beer up by 15p, a bigger rise than the total amount he gets paid for producing a pint of milk.

Mr Kendall said: “I know that Jim Paice has expressed frustration that the dairy supply chain isn’t operating properly or fairly at the moment.

“And, right now, the UK Government has a real opportunity to help address the flaws in the chain by backing the Commissions proposals for changes to milk contracts and the way supply chain deals are negotiated.

“We’re asking for Defra to join things up on dairy. This Government, along with politicians from all the main parties, recognises there needs to be an adjudicator to counterbalance the power of the supermarkets in their dealings with suppliers.

“At the same time the Government wants the UKs farmers to be less reliant on support and more reliant on the market for our returns. We want that too, yet, here we are, with a golden opportunity to help redress the balance of power in the dairy supply chain, and instead of backing it the Government stand back and seem reluctant to take it up. There are lots of people out there who are struggling to make sense of that and I am one of them.

“Lets be clear. We are not asking the Government to take action because our dairy farmers want to be treated differently from everyone else but because they want the same chance in the market as other players in the chain.”

The EU Commission presented its proposals on 9 December 2010 (for full details, see here). Of most relevance to UK dairy farmers are: a) the requirement for written contracts that set out the price farmers will be paid for their milk; the ways of varying the price – based on specified market indicators or a formula; the volume of milk to be supplied; and the duration of the contract, and (b) opportunities for farmers to form themselves into producer organisations that can negotiate terms with processors, including price.