How are the Welsh Set One Year on From Dairy Code?

ANALYSIS– As farmers across Europe prepare for quota removal, there are some parts of the UK that appear more bullish than others.

15 October 2013

3 minute read

Europe

England is gearing up for a competitive market place with its NFU vision Compete to Grow while Scotland and Ireland both eye up a 50 per cent lift in milk by 2025 and 2020 respectively.

However, in Wales, farmer confidence is at a low ebb and, a year on from a major market shake-up, concerns are being expressed that UK processors have not signed up to the dairy code.

Aled Jones, milk board chairman of the National Farmers Union for Wales, spoke of the current frustration amongst Welsh dairy farmers at the Welsh Dairy Event in Carmarthen on Monday.

He said that Wales runs the risk of getting ‘left behind’ unless the dairy chain can pass back value to producers as means of propping up confidence.

To an audience including First Milk Chairman and former minister for agriculture and food Jim Paice, he argued for formula price mechanisms to become the norm in order for farmers to feel they are getting a 'fair return'.

Mr Jones said that things are brighter since the SOS dairy campaign, a national media campaign which saw producers and consumers rally against low milk prices, but insisted the dairy chain pass back more value to producers.

Milk buyers, he insisted, must reflect the strong global demand coming from Middle Eastern and Asian countries.

He added: “There is a huge amount of frustration amongst Welsh milk producers at the continued failure of the supply chain to pay producers a price that fairly reflects the market place, there is a gap of around 7-8ppl at the moment between the key market indicators and farm gate milk price, this is too high and must be addressed.”

“Just over a year ago the voluntary code for dairy contracts was launched. This code has delivered some real change and has given farmers bargaining power that they have not had before in a de-regulated market.

"We need to kick on now though and get those companies outside the code to come on board. This can only happen if farmers supplying these companies get behind the code and demand that their buyer signs up, the more that sign up to the code the stronger it becomes.”

Earlier in the year, NFU Wales highlighted the £1.5 billion dairy product trade deficit which Great Britain currently has as an opportunity for expansion.

NFU Wales deputy president Stephen James said that, to maximise value in Wales, farmers need to be investing right now to make sure that the best processing facilities can be attracted to the region

Mr James said: “We see both Ireland and Scotland moving forward with ambitious targets to grow their dairy sectors, it is important that we don’t get left behind, particularly when we have such a commitment and professionalism amongst Welsh dairy farmers.”

Opportunity was the byword last month when a 50 per cent increase in milk was targeted at the release of Ambition 2025, the Scottish government’s report on the dairy industry.

Industry figureheads welcomed the report, which set out to be the foundation of Scotland’s dairying future.

Speaking last month, Jim Begg Dairy UK director general admitted the paper required some details ironing out but that, ‘the overall approach and direction of travel is undoubtedly sound.’

He said: “The report sets out a number of areas where the industry should focus its activities and we agree with these. Our industry is well placed to succeed. The Scottish dairy sector now needs to be ambitious to deliver fully on its potential.”