Improved market transparency, development of risk management measures, more formal producer representation, fairer milk contracts and a review of UK processing capacity are urgently required to ensure a sustainable dairy industry going forward, according to the NFU.
NFU dairy board vice chairman Michael Oakes and chief dairy adviser Sian Davies appeared before the first Efra Select Committee (Tuesday) of the new term to give evidence on the current dairy price situation.
“What is clear is that we need more accurate market information to help farmers and processors plan as well as developing risk management tools that can help manage volatility going forward.”NFU dairy board vice chairman Michael Oakes
With UK milk prices falling since November 2013 the majority of dairy farmers across the country are producing milk at prices far below the cost of production. The NFU says this is not sustainable and we need to learn from this crisis if we want to be better placed to survive the next one.
Mr Oakes, a dairy farmer from Worcestershire, said: “What is clear is that we need more accurate market information to help farmers and processors plan as well as developing risk management tools that can help manage volatility going forward. To help farmers access these tools and to make the most of improved market information we need more formal producer representation through co-ops and Producer Organisations. Too often these days I’m hearing from farmers who feel that they cannot raise their concerns with their milk buyer as they feel they may lose their milk contract. That’s why better producer representation is vital.”
Sian Davies said: “We’re also disappointed that the European Commission did not announce on Monday a review of the dairy intervention scheme, specifically the buying in price for butter and SMP. The current price of 21.7 euro cents provides little security for the EU’s dairy sector. We continue to call on the DEFRA and the European Commission to review this market management measure to make it fit for purpose in providing a true floor to the EU dairy market.
Mr Oakes added: “It’s still a desperate time for dairy farmers. I’m still not sure whether I’ll be a dairy farmer come the end of the winter. Having said that, I do believe the long term future of the dairy industry is bright. In the immediate short term we need early, or at least prompt payment of the Single Farm Payment this winter.”