The Royal Association of British Dairy Farmers (RABDF) has called for the industry to unite and urge Government to introduce, at the earliest, a milk regulator to ensure a fair and sustainable milk price is paid to producers from immediate effect.
"The industry is continuing to hemorrhage at an alarming rate; the last 12 months have seen 7% of farmers quit, and equally if not more worrying is the fact a large proportion of those losses are the larger and more profitable herds," according to RABDF chairman Tim Brigstocke.
"Two years ago, RABDF called for a national plan for the dairy industry, however there was much reluctance to such an approach. Since then, all manner of industry organisations and representatives have been keen to examine our current milk marketing operations to the nth degree that so much analysis has led to paralysis," he said. "None of their proposals have been turned in to action apart from the responses achieved by Farmers For Action, and even those are not getting back to farmers.
"Furthermore, the Office of Fair Trading having just issued its conclusions paper following its review of the Supermarket's Code is not going to take any further action or perceive the need to do so. Therefore RABDF is repeating its bid for a milk regulator, an Ofmilk, to at least try and get the dairy market working properly, at least in the short term.
"RABDF genuinely believes that an Ofmilk will achieve greater transparency throughout the industry, develop a price negotiation mechanism and overcome the current power structure comprising four major retailers, four major processors and just over 20,000 farmers," Mr Brigstocke explained.
Calls for a milk regulator were initially made by RABDF 18 months ago in its evidence to the milk pricing inquiry staged by the Government's Environment, Food and Rural Affairs Committee (EFRA.com). The Association's case was agreed in principle by committee chairman, David Drew MP, who indicated six months ago at RABDF's annual conference that the proposal should be revisited. Since, such a mechanism has gained support from other industry leaders.
"No one should be under any illusion that there are several potential major hurdles to overcome, including EC regulation and primary legislation, before we can get an Ofmilk price regulation scheme underway. However, we believe that a voluntary scheme which achieves industry wide agreement could be a realistic option," he said.
"There is some precedent for this type of price regulation already operating the UK: the Pharmaceutical Price Regulations Scheme (PPRS) which regulates the price of pharmaceuticals to the NHS. This voluntary scheme is governed by primary legislation which followed when the whole sector indicated its support for the approach. It is a model which demonstrates such a regulatory mechanism works, providing there is the spirit and will to drive it forward."
He added: "Government, although sympathetic and prepared to give pump pricing funding, will no longer nanny the farming community; the industry now has to find its own solutions. Introducing an Ofmilk will enable investigation of the cost structure in both processing and retail sectors to ensure that the total margin made within the industry is fairly distributed and that farmers receive a sustainable milk price."