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Dairy Farmers Must Benefit From EU Fund

18 December 2009

UK - Dairy officeholders from the UK farming unions have met to discuss the current dairy market situation and ensure that recent European developments benefit UK producers.

The unions agreed a common position on ambitions for the European Commission’s recently established High Level Milk Group (HLG) and the urgent need for the UK to draw down its 29 million euro share of the EU’s emergency dairy fund.

Speaking after the meeting, National Farmers' Union (NFU) Dairy Board chairman Gwyn Jones said: “There is complete agreement between us that active dairy farmers should receive and benefit from this fund in the spirit that it was offered by the Commission – that is to provide some short term relief to milk producers in a year that has been dominated by falling prices.”

Ulster Farmers' Union (UFU) Deputy President John Thompson said: “Dairy farmers in Northern Ireland have suffered badly this year with some of the lowest prices in the EU, which means that this money is badly needed.

“The fastest, fairest and simplest way to distribute the fund is by paying the money to individual producers as a direct payment based on annual production. Crucially, to be of any immediate relief to farmers, this money must be paid out as soon as possible with minimum hassle, bureaucracy and cost.”

Mansel Raymond, NFU Cymru Dairy Board chairman, said: “On top of the falls in prices paid to milk producers, over 1,800 dairy producers suffered significant financial losses as a consequence of the collapse of Dairy Farmers of Britain. This situation left many dairy farmers in a desperate financial state and some farmers are still suffering, so any financial relief will be welcomed.”

Commenting on the current EU dairy market situation, NFU Scotland Vice President Allen Bowie said: “Dairy commodity prices have improved continuously since July, but this strength has still to be properly reflected in farmgate prices in the UK. Some liquid prices have firmed a fraction, but are nowhere near the levels that dairy farmers should rightly expect to see by now.

“Two of the three major liquid processors - Wiseman’s and Dairy Crest - have returned a portion of the profit they are making from fast rising cream and butter prices back to farmers, but Arla’s reluctance to follow the lead of others by increasing its prices remains disappointing.

“Some processors genuinely believe that they are helping dairy farmers to manage volatility by not paying out a higher price, which they feel may not be sustained. This is a poor excuse. If buyers are serious about managing volatility then they would do well to start looking at the milk contracts they have with their farmers, which have real potential to offer transparency, stability and manage risk.”

Mr Jones, who is also Vice Chairman of COPA Milk, added: “All the UK unions are united in our ambitions for the work of the HLG, which include a recommendation that the Commission draws up a guide to best practice in relation to milk contracts, prepares standard template contracts - the NFU/NFUS’s template contract provides an excellent basis for this - and agrees legislation to eliminate unreasonable contractual practices especially with regard to milk pricing and variation of contracts.”

Mr Bowie added: “Contracts are only one of the issues at play here. Consideration should also be given by the Commission to the development of a supply chain code of practice and ombudsman to provide some robust recourse should the supply chain break down, backed up, if necessary, by EU legislation.”

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