MPs urge action on milk price cuts
MPs have urged the government to do more to protect dairy farmers from sharp falls in milk prices.
The Commons Environment, Food and Rural Affairs Committee said farmers were being forced out of business every week by factors beyond their control.
The remit of the government’s groceries watchdog should be extended to cover dairy suppliers, its report said.
The government said it was doing all it could to help farmers cope with the “volatility of the global market”.
Milk prices have come under pressure from a combination of rising supply and falling demand, particularly as a result of lower-than-expected demand from China and Russia’s ban on food imports.
Moscow’s decision to ban EU dairy products, taken in response to sanctions over the Ukraine conflict, had led to 2.5 billion litres of milk not being sold in Russia, the MPs said.
BBC environment correspondent Claire Marshall said to keep cattle well fed and looked after costs a farmer about 30p for each litre of milk produced – but most were being paid just 20p a litre.
“Intense competition among supermarkets is also having an effect,” she said. “In several supermarkets you can now buy four pints of milk for just 89p.”
Farmers have held protests, urging supermarkets to pay more for their milk.
The report said farmers had been leaving the industry “in significant numbers in recent years”.
The NFU said in December that the number of dairy farmers had dipped below 10,000 for the first time – a 50% fall since 2001.
The committee said there was no “single solution” but that it was incumbent on the government to “promote UK dairy produce domestically and in growing export markets”.
And it told the government to “urgently” consider extending the role of the Groceries Code Adjudicator to include dairy farmers in the scheme.
The adjudicator was set up to investigate complaints and ensure suppliers to the 10 largest supermarkets are treated “lawfully and fairly” based on an established code of practice.
But because it investigates only complaints relating to the retailers’ direct suppliers, the “vast majority” of dairy farmers are not covered, the report said.
The adjudicator also does not get involved with pricing disputes.
The MPs also called for an EU-wide review of milk prices and for clearer “country of origin” labelling of products.
‘They said more dairy farmers could be helped by forming “producer organisations” to increase their market presence.
Committee chairwoman Anne McIntosh said: “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 Department for Environment, Food and Rural Affairs said it had given farmers “greater clout in the marketplace” through forming producer organisations, while a code of practice to give farmers a “fairer deal” now covered 85% of UK dairy production.
A spokeswoman said the long-term prospects for the industry were good, and there would be a review of the Groceries Code Adjudicator next year.