DALES MP Rishi Sunak has launched a comprehensive plan to help beleaguered dairy farmers hit by the low price of milk.

The intervention follows his fact-finding tour of Wensleydale, talking to farmers trying to cope with the crisis.

The Richmond MP, a member of the Environment, Food and Rural Affairs select committee, wants industry and government to work together to secure the industry’s future. His proposals include: A fairer deal from retailers; an end to milk being used as a ‘loss leader’; better labelling of British produce; more domestic production of dairy products; more supply chain transparency; a working dairy futures market for price stability; and ‘immediate financial assistance’ for dairy farmers.

Mr Sunak said: “Last week I spoke to an 80-year-old farmer who told me that in a lifetime of dairy farming he had never seen times so bad. With farm gate milk prices falling 30 per cent in a year – in many cases below the cost of production – it’s far from an exaggeration.

“We can’t kid ourselves that there is a magic wand, but after speaking to local farmers, government ministers and industry experts I believe there is more that both the Government and the industry can be doing to help."

He added: “Without its dairy farmers, Yorkshire’s magical landscape would see its lush fields turn to scrub and its dry-stone-walls go unrepaired. And with Britain already only 60 per cent self-sufficient in food, our country’s ability to feed itself in a time of crisis would be diminished."

Mr Sunak's detailed proposals are contained in the following ten-point plan:

1. More retailers giving farmers a fair deal

Ensure every major retailer follows the lead of some supermarkets in paying a fair price for British dairy produce.

 

2. An end to milk being used as a ‘loss leader’

Many supermarkets now charge only £1 for four pints. While supermarkets often absorb this loss themselves, this kind of pricing has the effect of forcing down prices in the entire market as smaller retailers struggle to compete.

 

3. Better labelling of British produce

Many consumers are unaware that a number of the major cheddar brands on the shelves are produced in Europe. We need clear packaging that empowers consumers to buy British.

 

4.  More domestic production of dairy products

Two thirds of our cheese and 30 per cent of our butter is imported. We need to invest more in processing technology to make sure we are adding value to British milk by turning more of it into British butter, yogurt and cheese.

 

5. More supply chain transparency and enforcement

We know how much a farmer gets paid for a pint of milk, and we know how much we pay for it in the shops. What we don’t know is how big the margins are in-between. We need to work towards the kind of transparency that allows us to follow milk from farmer to shelf. This then has to be enforced by a tough Grocery Code Adjudicator.

 

6. More dairy Producer Organisations

Groups of farmers banding together to negotiate a better sale price for milk and a lower purchase price for feed and machinery are commonplace across Europe. In the UK we currently have only one such producer organisation. We need more.

 

7. Government must buy British

National government is working hard to purchase British dairy products, but we must push local government, hospitals, schools, and military establishments to do the same. 

 

8. A working dairy futures market

Futures are a way for farmers to agree a pre-arranged price for milk they will produce in the future. The price stability this can give has the potential to be invaluable to the volatile dairy industry.

 

9. Review of levy board spending

Every dairy farmer in the UK currently pays a percentage of their income to a government- run levy board (AHDB Dairy). Many farmers feel that more of that money needs to be spent promoting the benefits of milk and encouraging consumers to choose British.

 

10. Immediate financial assistance

The EU has announced a €500m crisis fund to support vulnerable dairy farmers and we must get our fair share. Also, it is important that regular CAP payments made to farmers should be made as quickly as possible to ease cash flow. Lastly, HMRC and banks must be flexible in how they treat farmers.