Ruthless retail milk discounting will ultimately damage the sustainability of the UK dairy industry if it continues, the NFU’s dairy board chairman has claimed.
Giving evidence to the Environment, Food and Rural Affairs Select Committee on the current dairy price situation, Rob Harrison said that while the farm gate milk price downturn has been caused by increased global production combined with reduced global demand, there are a number of clear actions that can be taken to cushion the impact on farms.
“We know that Government can’t step in to the market, but they can support our hard-working dairy farmers at a national and European level,” he said.
“In Brussels, they can back the NFU’s call for a review of the intervention price for dairy products as well as a targeted re-opening of Private Storage Aid for cheese - something that can help rebalance the EU market.
“We’re also calling on them to continue their work on seeking new export opportunities and promoting our high quality dairy products both within Europe and outside.”
To help push consumption, he added, the NFU was urging policymakers to improve the labelling of dairy products, ensuring consumers are buying British, and to increase coordination on health messages and campaigns, showing dairy products are, and will continue to be, a vital part of a healthy, balanced diet.
To help farmers better manage volatility, meanwhile, the organisation has called on Government to help develop a farm management deposit scheme and to extend profit averaging to five years, such as was recently announced by the Irish Government.
“We would also like to see the remit of the Groceries Code Adjudicator extended down the supply chain to cover farmers’ relationships with processors,” Mr Harrison added.
“We believe this would bring better transparency to the impact of the ongoing liquid milk discounting that we’re all seeing in our retailers.
“The NFU has already written to all the major supermarkets to ask the simple question: ‘What are you doing to support British dairy farmers?’, as there are a number of areas that can be improved.
“A number of dairy farmers are within dedicated supply relationships, but using milk as a loss leader puts downward pressure on the whole industry and, while farmers’ margins are being squeezed by global and political issues, we need our domestic retailers to support our farmers more than ever,
“Today another milk buyer announced farm gate milk price cuts for December. We now need Government to do all it can to support a sustainable supply of milk going forward as we know the public are rightly proud of the high quality dairy products British farmers produce.”
Also giving evidence to the Efra Select Committee session on the effectiveness of actions to support the UK dairy industry were Tenant Farmers Association (TFA) chairman George Dunn, DairyUK chief executive Dr Judith Bryans, chairman of Farmers for Action (FFA) David Handley, and Groceries Code Adjudicator, Christine Tacon.