The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)
This has been a difficult year for domestic dairying and parts of the industry have struggled. However, there is now a positive way forward following the groundbreaking code of practice on contractual relationships that the industry has put in place. Dairy farmers, processors and their customers are now making use of the code to support better contracts and clear and transparent pricing.
The Government are also taking further steps to support the dairy industry so that dairy farmers can have a stronger position in the marketplace.
From today a new £5 million dairy fund will be open for business through the rural development programme for England. To help business growth, the fund will allow farmers to apply for £25,000 minimum grants to support groups of dairy farmers. The grants could cover costs to establish new co-operation structures, such as producer groups and co-operatives, or to invest in technology to take advantage of new market opportunities.
DEFRA is also consulting on new rules that will allow English dairy farmers to come together and form producer organisations to sell their combined milk to processing companies rather than negotiate as individuals. We are launching today a six-week consultation on how to implement the European Union’s dairy package in England. Scotland, Wales and Northern Ireland will hold their own consultations. Currently farmers negotiate with processors as individuals, but under the new EU rules, producer organisations, which are already widespread in other European countries, could cover up to a third of UK production and would negotiate on behalf of members.
Dairy is our largest agricultural sector and there are real opportunities for UK dairying with growing global demand for dairy products. Because of its strong natural dairying advantages, the UK is well placed to exploit domestic added value and export markets. The Government will continue to support the development of a profitable, thriving and competitive dairy industry.