CAMPAIGNING MP Rishi Sunak has called on the Government to renew efforts to set up a market to protect dairy farmers from volatile milk prices.

The Richmond MP has asked Environment Minister Andrea Leadsom to step up efforts to create a futures market for UK dairy products.

A futures market is used by sellers to protect themselves from big swings in prices by entering into a contract to sell produce at a set price at a future date.

In a letter to Mrs Leadsom, he wrote of the "extreme hardship" faced by many dairy farmers caused by record low farm gate prices.

He said: "Futures would allow prices to be hedged, reducing volatility and protecting dairy producers from the sudden price plunges that have taken such a terrible toll on Britain’s hard working farming families."

Mr Sunak said that his experience of global business before entering Parliament had shown him the effectiveness of futures markets. He hoped that with Mrs Leadsom having a similar financial background she would grasp the opportunity to create a UK dairy futures market.

Last year, Farming Minister George Eustice told Mr Sunak that Defra, working with the Agricultural Horticultural Development Board (AHDB), had recruited a financial futures market and hedging specialist to work on the project. In his letter to Mrs Leadsom, Mr Sunak asks for an update on the work that has been done.

He said: "I am sure you will appreciate the positive impact a working futures market could have on the rural economy and the communities who depend upon it. I urge you to continue driving forward Defra’s good work in this area and take the swift action our farmers need by making a British futures market a reality as soon as possible."

Last week, Mr Sunak highlighted another of the measures in his ten point plan for the industry with a visit to a farm which turns a proportion of the milk its Holstein-Friesan cows produce into clotted cream and yoghurt.

He said Stamfrey Farm at West Rounton, near Northallerton, is a good example of how dairy farmers can protect themselves from low prices by adding value to liquid milk.

The Gaudie family turned to processing the milk produced by their 140 organic cows more than 10 years ago when milk prices were also at an historic low. Investing in processing the milk into some other product was the only way they could make their farm sustainable.

Sue Gaudie, who comes from Cornwall, turned to making clotted cream and, later, yoghurt. Today, the award-winning products are stocked by shops and delis across Yorkshire. Half the clotted cream is taken by Bettys tea shops for their famous afternoon teas.

While not all dairy farmers could do what the Gaudies have done, Mr Sunak said, their resourcefulness and determination to find new markets had created a sustainable business for the family.

He added: "We must invest in processing capacity, not just on a small scale as they do at Stamfrey, but on a larger scale. This country imports far too much cheese and particularly yoghurt which we could easily make here in the UK with UK milk."

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