03/05/2011image expired

NFU Cymru representatives have praised new rules proposed by the EC which would see dairy farmers’ role within the supply chain being strengthened. The statements, encouraging dairy farmers to lobby incoming Welsh Assembly members, MPs and milk buyers, were made at the NFU Cymru Dairy Strategy Roadshow in Pembrokeshire.

NFU Cymru deputy president Stephen James lamented the current state of the UK dairy industry; “The dairy market in this country is not working. The British dairy industry should possess many advantages, ranging from growing demand to efficient milk producers and a good climate for producing milk. Yet it lurches from crisis to crisis and has suffered over a decade of under-investment and low profitability.”

As part of the roadshow, Union representatives outlined their supply chain lobbying activities and reported on on-going work to secure better milk contracts for farmers. NFU Dairy Board Chairman Mansel Raymond applauded a package of measures outlined by the European Commission, saying the EC recognised that contractual relationships between milk producers and purchasers are fundamental to ensuring fairness. Raymond claimed the package could revolutionise the way dairy farmers sell their milk and negotiate with buyers.

Raymond said, “We’re heartened that the European Commission has recognised that the contractual relationships between milk producers and purchasers are essential to guarantee a fairer deal for farmers within the dairy supply chain. There are some exciting proposals on the table that would significantly strengthen the position of dairy farmers within their supply chains.”

However, the NFU Cymru delegates explained the need for a concerted effort to lobby the government and buyers in order to empower farmers. Mansel Raymond said, “We need both the Welsh Assembly Government and UK Government in Westminster to grasp the nettle and take the required action that’s needed to stop the current unfair commercial practices and to give their backing to a move towards fairer milk supply contracts. Milk buyers, processors, retailers and governments have to acknowledge this and act now to ensure fairer and more sustainable milk contracts”

The Cost of Milk Production report published by the NFU earlier this year shows the average cost of production to be around 30 pence per litre, whereas the current average UK milk price is only 26 pence per litre. Raymond said this is “nowhere near enough to even cover costs, let alone to allow us to re-invest in our businesses.”

Roger Lewis, Pembrokeshire NFU Cymru County Milk Chairman elucidated that, “There’s a desperate need to address the economic sustainability of the UK dairy industry. Every conversation I have with farmers about the problems in the dairy industry always comes back to milk price.”

However, trade association Dairy UK were less enthusiastic about moves being made by the EC; Director general Jim Begg said, “The package is still evolving through the European Parliament, but at this stage it’s difficult to see how it will address the key challenges of managing volatility of both input costs and market revenues. Indeed, some of the proposals may work against stability.”