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Politicians At All Levels Must Grasp Moment For Dairy

11 February 2011

SCOTLAND, UK - Market alone will not resolve dairy crisis says NFU Scotland. National Farmers' Union (NFU) Scotland is calling on politicians at Holyrood, Westminster and the EU to make the most of a growing stream of political initiatives which could help to secure the future of Scotland and the UK’s dairy industry.

Political momentum across the EU, at Westminster and in Scotland’s own devolved administration has led to a number of undertakings on contracts and producer negotiating power, which NFUS believes all the UK’s politicians and the industry must engage with and support.

These include the conclusions of the EU’s High Level Group (HLG) on dairy, which is being steered through the European Parliament by Northern Irish MEP, Jim Nicholson and is about to be considered in the House of Lords EU Committee A. In addition, the House of Commons EFRA Committee is embarking on a dairy inquiry, to which NFUS will submit evidence, and Stephen Phillips MP has introduced a (private) Dairy Farming Bill, which will have its second reading in June this year.

The UK Government has said that it is still committed to pressing ahead with installing an adjudicator to police the Groceries Supply Code of Practice, and NFUS awaits the draft Bill which will create the legal framework for this with great anticipation.

NFUS will meet UK Agriculture Minister, Jim Paice on Monday 14 February to discuss options for the sector, and meetings have also been held recently between NFUS representatives and Cabinet Secretary for Rural Affairs and the Environment, Richard Lochhead, and between MSPs, NFUS and retailers on the subject.

NFU Scotland’s Dairy Policy Manager, George Jamieson said: “Low or non-existent profit levels over a prolonged period are in danger of destroying Scotland’s dairy sector, even though our dairy producers are among the most efficient in Europe.

Producers have very little control over the price they are paid and NFUS, led by the Union’s own Milk Committee, has long called for a supermarket adjudicator to enforce the Groceries Supply Code of Practice, which could establish fairer supply chain arrangements across all sectors.

“Politicians must understand that the milk market is not working and, while it may recently have responded with slight price increases, these are too little and too late. The UK’s market indicators show that dairy producers should be receiving 32ppl for their milk, but they are only getting around 26ppl.

“The EU Commission, in full agreement with the conclusions of the EU’s High Level Group on dairy, contend that the market dysfunction which is undermining our dairy industry will only be resolved with more effective contracts with a price formula, backed up by increased producer bargaining power and co-operation.

“With high level political activity now taking place in the EU and Westminster, MPs and MEPs have a golden opportunity to secure a more sustainable future for our dairy industry. We urge the UK Government and EU Parliament to adopt the EU Commission’s recommendations without dilution; the UK Government to push on with legislation to introduce the supermarket adjudicator, and the Scottish Government and MSPs to continue their highly valued work in bringing dairy producers, processors and retailers together.

“NFUS has written to Scottish MEPs about the EU Commission’s recommendations and is in the process of arranging a meeting with Jim Nicholson MEP to discuss them. We shall also be drafting a submission for the House of Lords EU Committee and the EFRA Committee as they consult upon the EU’s recommendations and the future of the dairy sector in general.”

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