Dairy farmers need greater protection – MPs

And the Environment, Food and Rural Affairs (EFRA) select committee wants the Government to bring all dairy farmers – no matter how small – under the protection of the Groceries Code Adjudicator (GCA) from major retailers.

Anne McIntosh, committee chairman and MP for Thirsk, Malton and Filey, said: “Frequent, sharp and unpredictable rises and falls in milk prices are driving dairy farmers out of business every week. The volatility of worldwide and domestic milk markets is making financial planning and investment impossible for small-scale producers unable to hedge against changes beyond their control.

“The vast majority of dairy farmers fall outside the protection offered by the Groceries Code Adjudicator. She can only investigate complaints involving direct suppliers to the big 10 supermarkets and retailers, and as most milk production is small-scale, that excludes most dairy farmers.

“The EFRA committee thought that was wrong when the GCA was set up in 2013, and events since then justify our view that her remit should be extended to include small-scale suppliers, whether or not they have a direct relationship with the ultimate seller of their produce.”

The committee also called on the Government to immediately give the adjudicator the power to fine retailers.

Miss McIntosh said: "We were shocked to learn in evidence that the Government has spent more than a year failing to set the level of fine the GCA can seek when she finds against a retailer. This leaves her unable to use her main power, and we call on the Government to set that fine immediately, and before the General Election in May.”

In its report on dairy prices the committee also seeks an EU-wide review of the milk intervention price and calls on farmers themselves to consider forming Producer Organisations to increase their market clout.

Farmers have faced deep and rapid drops in milk prices in the past six months, arising from a drop in worldwide demand, a Russian trade ban, and international oversupply following high milk prices in 2013.

Protests have resulted at some processing plants, and farmers have been leaving the industry, bringing the total number of UK dairy farmers below 10,000 for the first time.

The committee also called on the Government to help dairy producers tap more worldwide export opportunities, press for clearer ‘country-of-origin’ labelling on products, and learn lessons from the current milk price crisis to improve codes of practice regulating dairy industry pricing and operations.

The NFU fully endorsed the EFRA report which included many of the points it had made to the committee.

Rob Harrison, NFU dairy board chairman, said: " I’m glad to see that the committee took into account our views in their report. Top of the agenda is a push for a review of the EU intervention price for dairy products – I’m glad that committee members agreed with me that 17ppl is not a safety net of any sort and this could help the current dairy situation immediately."

He said a dairy export strategy must be developed; there should be mandatory country of origin labelling on dairy products; and dairy farmers should be encouraged to collaborate through producer groups to give them more bargaining power.

Mr Harrison said: "Finally, I’m extremely encouraged by the focus in EFRA’s report on the role of the Groceries Code Adjudicator. The NFU has always believed that the GCA’s remit should be extended to cover primary producers and I’m glad to see that EFRA believes that the code needs extending to include small scale producers.”