Milk Prices

1st September 2015
Over recent weeks we have seen a number of protests about milk prices taking place at our supermarkets. The dairy industry is the backbone of many of our rural communities here in Torridge and West Devon, and makes a significant contribution to the British economy. It is therefore vital that we do what we can to support it.
As the protests show, because of the volatility of the global market, milk prices remain a serious problem for many dairy farmers. The numbers of dairy herds have reduced by half since 2002 and prices last year alone fell by 15%. . 
Ahead of an extraordinary Agriculture meeting in Europe later this month, the Government held useful discussions with the devolved administrations and farming unions in August to explore what can be done to give the industry the long-term stability and commercial opportunities it needs to manage global volatility. It is essential that the Government provides all the help it can to the industry to create a sustainable future.  
The Dairy Code of Practice, launched in 2012, which now covers some 85% of the so-called “raw milk” market, has gone some way to improving contractual relationships between farmers and milk buyers.  Yet there is still a great deal more to be done. Making it easier for farmers to form approved producer organisations, exempt from certain competition law restrictions, to negotiate prices is one measure that may help. 
In addition, following the recent meeting, a Defra working group is being created, which will encourage supermarkets and other providers to collaborate in better branding and labelling of British products. 
I am encouraged that the Government has also urged HMRC to be flexible when dealing with dairy farmers. Importantly, in the most recent Budget, the Chancellor announced that all farmers will be able to average their incomes for tax purposes over five years, which should make a significant difference. In addition DairyCo, part of the Agriculture and Horticulture Development Board, has set up a special unit offering financial advice for dairy farmers.  
Looking ahead, the Government will seek to open and promote new export markets abroad and continue to back British dairy products at home, which includes making the strong case for Country of Origin labelling. Good progress has been made already: dairy exports for non-EU markets grew by 47 percent last year and are now at their highest level ever, at £1.3 billion. 
Developing the conditions for a better deal for dairy farmers is a high priority for this Government, and I shall certainly do all that I can to ensure that it remains so. 
This article also appeared in the Tavistock Times

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