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Stackyard News Oct 06

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APPG calls for greater transparency in dairy food chain

Calls for greater transparency throughout the dairy supply chain were repeated by All Party Parliamentary Group for Dairy Farmers chairman, Daniel Kawczynski when he met to discuss the sector’s parlous state with Defra Secretary of State, David Miliband on Wednesday, 11 October.


dairy cow

“While it is a straight forward process finding out dairy farmer margins – a joint RABDF and NFU survey has just confirmed producers are losing on average almost 4ppl; it is relatively simple to do the same for processors, however it is virtually impossible to determine retailer margins,” explained Mr Kawczynski.

“More than two years ago, an inquiry, Milk Pricing in the UK, concluded that the dairy market was not operating properly and despite its best efforts to determine who took what share of the retail price of a litre of liquid milk, it was unable to account for some 18ppl,” he said. “I am staggered to find that in the meantime, no progress has been made. I reminded Mr Miliband that the Dairy Supply Chain Forum chaired by farm minister, Lord Rooker provides a real opportunity for influence and bring about much needed change and also rationalization within the industry.

“That rationalization within the processing sector is desperately needed, however we did agree the role and the remit of the OFT was not well understood,” said Mr Kawczynski. “Lack of understanding was frequently being used as a smoke screen to avoid consolidation, when in fact company merger within other EU states was much more relaxed, as was a fairer split in margin.” Other countries had milk price regulated or at least indexed. For example, France, Germany and Holland have partial indexation, while in Ireland, the co-ops use contract formulae and \n independent price audit.

“We also brought him up to speed with the Irish Government’s latest move to support its dairy processing sector with match funding for €300m of European support. We indicated that this was another prime example of a non level playing field and a lack of common approach to the funding of a scheme designed to support sustainability objectives.

“We believe that this massive injection of capital into the Irish processing sector will seriously impact on our marketplace, in particular pressure from imports of cheap Cheddar cheese.”

Tim Brigstocke, chairman of RABDF which delivers the APPG’s secretariat commented: “David Miliband expressed a measure of genuine concern for dairy producers and their future. We implored on him the pivotal and essential role of farmers in maintaining not only the landscape, but also a viable farming sector essential to achieve his one planet farming ideology - farming that reflects the need for us to live within the means of the planet, and farming which helps us live within the needs of the planet.”

He added: “APPG for Dairy Farmers is now the largest APPG within Parliament with more than 80 cross party MP members and indeed the most active. We believe that this group of MPs has the potential to bring about the much needed change in the industry. We are fully aware of just how important Parliament is in creating a legislative framework for a sustainable industry.”

link Dairy Farmers Should Be Valued More
link The Dairy Event builds on success
link Dairy Industry Needs Strong Regulator

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