The NFU has today endorsed Efra Select Committee calls for the government to ensure British dairy farmers have fairer contracts and greater strength in price negotiations.
The committee’s report warns that the European Commission's proposed package of measures - on its own - doesn’t go far enough to redress the problems facing the UK dairy industry. The NFU agrees that while the commission package is a starting point, more needs to be done to address the failures in the market place for raw milk at farm gate.
NFU chief dairy adviser Robert Newbery said: “The key problem is that dairy farmers routinely fail to see prices rise as fast and as high as the dairy commodity markets. Yet when these markets fall, the milk price paid to farmers drops like a stone. This effect of ‘asymmetric pricing’ is a clear result of the exploitative nature of milk contracts and lack of negotiating power that currently exists.”
The Efra Committee’s conclusions come at the same time as the DairyCo commissioned report on Asymmetric Price Transmission in the Dairy Supply Chain and the Kite discussion document – World Class Dairying – A Vision for 2020. The DairyCo report identifies that farmers are losing significant amounts of money and points to the role of policy makers in redressing the balance of power in the supply chain.
Mansel Raymond, NFU dairy board chairman, said: “Farmers have been the losers in the UK dairy supply chain for too long now. Today I’m drawing a line in the sand and challenging each and every milk purchaser to step up to the mark and give their farmers the equitable trading conditions they deserve.
“UK dairy farmers are some of the most efficient, skilled and committed in Europe so it’s frustrating that we’ve got to the stage where the UK has the lowest milk price in the EU. The minister has challenged industry to sit down and draw up a voluntary code of practice for dairy contracts and negotiations. We have identified those weaknesses so let's work together to put things right. This is the only way we can look forward to a future of growth and profitability for our industry.
“The Kite report also shows us what an exciting and positive future this industry could have, pushing UK production to 15bn litres by 2020. For this to happen we must stop the continued shrinking of our national herd and use better contracts and negotiations to ensure our dairy farmers get a fair return on their investment and to see a vibrant industry for the next generation.”
Find out about the NFU's Back Dairy campaign, and how you can play a part in the lobbying effort, by clicking here.
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