Milk Production

Lord Wigley Excerpts

Thursday 15th January 2015 Lords Chamber

[Lord De Mauley]

My Lords, to address the short-term problem, my honourable friend George Eustice, the farms Minister, yesterday held a farming resilience summit precisely so that this subject could be a central focus. Noble Lords may also have seen that DairyCo has offered advice and assistance to farmers in cash-flow planning and volatility management. Other actions in hand include investigating whether the seasonal cyclicality of prices lends itself to the use of futures markets to smooth the price curve, and we are putting pressure on the commissioner to accelerate the improvement of country-of-origin labelling.

[Lord Wigley (PC)]

Does the Minister accept that there is a need for long-term stability for the dairy sector to flourish, and that a price below 29 pence a litre at farm gate, which was the average price in November, is not sustainable? Does he accept that action needs to be taken? Does he believe that the steps to which he referred with regard to co-operation with our European partners in dairy matters on the question of labelling is enough to deliver what is needed for that stability?

[Lord De Mauley]

I certainly agree with the first half of what the noble Lord has said. I am not suggesting that the work on labelling is by any means the only tool. That is why, as I have said, we are looking at the use of futures markets, because there is evidence of a seasonal cyclicality of milk prices. At certain times of the year a crunch tends to be worse, and such crunches can be foreseen, so we want to smooth that curve. But crucial is our work on exports, and noble Lords will be interested to know that exports to non-EU markets of dairy products are up by 47% year on year.